Fiat Group and Tata Motors have signed a memorandum of understanding to establish passenger vehicle, engine and transmission manufacturing venture in India for the domestic and export markets.
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The JV will make both Fiat and Tata vehicles in the same plant.
Fiat products will include the recently launched Grande Punto hatchback, a new small sedan plus a small diesel engine.
The factories, in Ranjangaon Maharashtra, will have annual capcity of 100,000 cars and 250,000 engines and transmissions.
The two automakers added they have also agreed a 60-day study to consider industrial and commercial co-operation in Latin America where Fiat already has vehicle plants.
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By GlobalDataThe study will consider a number of different vehicles – especially utility vehicles and pickup trucks – with an eye to using the existing Fiat plant in in Cordoba, Argentina.
Products manufactured there would be sold in various Latin American and overseas markets under both the Fiat and Tata brands.
“While definitive shareholder, licensing and other agreements are being finalised, the signing of the MOU for Indian operations and the study of the co-operation in Latin America reflect a growing commitment of the two organisations to work together and leverage mutual strengths to address key markets through a combined, complementary product portfolio and exchanges of technology,” Fiat and Tata said in a statement.
Fiat group chief executive Sergio Marchionne, who on Monday hinted that Fiat would soon announce more alliances, said: “As we said at the time we signed the distribution agreement in India, this is a strategic partnership which is evolving by leveraging on the respective strengths and continuously identifying new opportunities to be jointly exploited.
“Not only in India but also on a global scale.”
Tata Group and Tata Motors chairman Ratan Tata added: “This is the beginning of what promises to be a far-reaching, long term relationship between Fiat Group, Italy, and Tata Motors. Both companies have complementary strengths, convergent objectives and shared values. Together, we can meaningfully address markets in India and other select geographies, combining technologies, products and human skills of both organisations.”
