Thursday, June 16, 2011
By Pranjal Gera
The deal with Fiat needs to be checked, says Ratan Tata
Tata Group Chief Ratan Tata said that the deal between Fiat and Tata Motors needs to be re-planned to maximize its potential as it is not running as smoothly as anticipated.
He also said that having a good personal relation with Sergio Marchionne, Chief Executive Office, Fiat was not a big help and these relations were not portrayed in their business deals.
Where Fiat has not yet made its impact on the Indian market, Tata also said that it is a major setback in the deal and Fiat needs to launch more models in the upcoming months and also needs to keep an eye on the cost of its components and spare parts to gain maximum profit from the deal.
The agreement between Tata Motors and Fiat was signed in 2007, where both of them agreed to co-manufacture the products at Ranjangaon facility near Pune, and also to provide each other with back-end support and help in distributions.
Presently, the Fiat cars are sold at Tata Fiat outlets, and a new decision was made recently where Fiat proposed its plans to sell its cars at new Fiat Brand showrooms.
With a lowering sales rate, Fiat sold only 21,066 units in 2010-11, with a fall of 14.81 % as compared to previous fiscal, when they sold 24,727 units.
Ratan Tata also said that he won’t be calling off this deal, as it is a very healthy concept but needs to be taken care of and the two companies need to coordinate more closely in order to gain from this partnership.
Some of the popular hatchback models in the Indian auto market are Ford Figo, Maruti Swift, Hyundai i10, Chevrolet Beat and Volkswagen Polo. Apart from these popular models, cars going to hit the Indian roads this year are Toyota Etios Liva, Maruti Cervo and New Ford Fiesta.
