Motor and Tata Motors are still discussing the possibility
of building a low-cost car, according to news agency
reports. Fiat CEO Sergio Marchionne said Tata Motors
is the perfect partner for Fiat to develop such a car,
the report added. Marchionne, who was the CEO of Ferrari
before being elevated as Fiat CEO, is in Detroit for
the North American International Auto Show, one of the
automakers like Fiat are striving to bring down costs
and become more competitive in the face of severe competition
from Japanese and other Asian automakers. Some of these
companies are forging alliances with smaller automakers
in emerging markets to develop cost-effective models.
growing base of component suppliers with high engineering
skills and cost-effective labour force have made India
an attractive destination for automobile manufacturers.
While companies like Ford, Hyundai and Suzuki have been
using their plants in India to supply overseas markets,
others like Fiat and Renault have formed alliances with
domestic companies to establish a base here.
Ghosn, CEO of both Nissan and Renault, had stated recently
that global automakers should learn from Chinese and
Indian manufacturers about cost management. He also
cited the specific example of the low-cost small car
being developed by Tata Motors, which would be the cheapest
production car anywhere in the world at an expected
cost of under $2,500.
details have not been revealed, it is likely that Fiat
and Tata Motors would consider a model similar to the
Renault Logan. Designed and developed by Renault''s East
European subsidiary Dacia, the Logan has been well accepted
across East Europe. In the more mature markets, the
model is positioned as a value-for-money option for
price-conscious buyers. The JV between Renault and M&M
is all set to launch the Logan shortly in India.
Motor, which has struggled in the Indian market and
has incurred heavy losses, announced an alliance with
Tata Motors last year under which the latter took over
the marketing and sales of Fiat cars in India through
joint showrooms. The partnership was expanded with the
formation of an equal JV which would invest Rs2,000
crore at Fiat''s plant in Ranjangaon, Maharashtra.
Fiat-Tata Motors JV is expected to roll out a twin-cabin
pick-up truck, the TL Sprint, in the domestic market
this year. The model was unveiled at an auto show in
Italy last year. Fiat may sell this model in Latin America
while Tata Motors may launch it in Thailand through
its recently formed JV with a local company. Tata Motors
may also look at introducing this model in the African
market, where it has been steadily expanding its presence.
Fiat-Tata Motors JV would also launch the redesigned
and upgraded hatchback model Palio from the Fiat stable
this year. When the Ranjangaon plant is fully completed
by next year, the JV
would roll out the Grande Punto which is a big hit in
Europe. A sedan version of the Grande Punto, called
the Linea, would also be launched by next year to replace
the unsuccessful Petra.