Indian auto giant Tata Motors and Fiat on May 2 announced that they have ended the distribution alliance formed in the year 2007. The two companies came together to distribute and service the vehicles of Italian firm.
The agreement between the companies was a 50:50 joint venture and had agreed to a joint distribution network and back end support. The joint venture also included the co-manufacturing of products at the Ranjangaon facility located near Pune in the state of Maharashtra.
The companies issued a joint statement which said, “Fiat and Tata have agreed that in order to further develop the Fiat brand in India, management control of Fiat’s commercial and distribution activities will be handed over to a separate Fiat Group owned company. Currently, Tata Motors has been managing the distribution responsibility of the Fiat branded products in India through joint Tata-Fiat dealerships”. The companies in the five years of joint venture has produced some 1,90,000 cars along with 3,37,000 powertrains.
The manufacturing activities will be continuing as they are all outside of the new distribution agreement and will also supply the cars to Fiat and Tata. The chief of Tata Group, Ratan Tata said last year that the Fiat Association needed to be critically examined to optimise its potential.