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ShareMUMBAI: Tata Motors is in talks with Italian auto major Fiat for a possibility of joint manufacturing at the latter's Ranjangaon facility near Pune in Maharashtra, Tata Motors chairman Ratan Rata told shareholders during the company's 61st annual general meeting Tuesday.
In September 2005, Tata Motors and Fiat SpA had signed a memorandum of understanding to "analyse the feasibility of cooperation, across markets, in the area of passenger cars that would encompass development, manufacturing, sourcing and distribution of products, aggregates and components."
Till date, the MoU has moved to one firm marketing partnership, under which some Tata Motors dealers are selling Fiat cars as well.
"The Fiat deal envisages introducing more advanced products in the country. It is not inconceivable that the current marketing alliance may stretch beyond the Fiat brand and include other Fiat's brands like Alfa Romeo, Maserati, and Ferrari. It envisages joint product development, car badging (i.e. Fiat may produce Tata branded cars and vice versa), and technological exchange," said Tata.
Fiat has two manufacturing units, one in Kurla in Mumbai and another one in Ranjangaon. Owning to low volumes, even the Kurla unit is under utilised and hence it makes a lot of sense for Fiat to undertake contract manufacturing for Tata Motors.
Answering shareholders queries on the proposed Rs 1 lakh small car project, Tata said the company is on schedule to meet the launch target of calendar 2008.
GE partnership: "We are hopeful of meeting the price target. We currently have no partnership with GE. Weare keen that it be made out of reengineered plastic (DNA Money was the first to report this on May 24).This will make the car lighter, fuel efficient, and reduce the time to market," Tata said.
Small car volumes: On the market size for the proposed small car, Tata said the addressable size could be about 3.5 million units a year. "We produced 1 million car last year, and of which 60% were of low end. We also produced 6 million two and three wheelers. Taking a 30%market from both the sides gives an addressable market size of 3.5 million vehicles. And of this if we assume 30% market share, our volume should be 1 million vehicles a year," he said. He, however, cautioned that this kind of volume could be achieved only in a mature market.
