The ailing Tata Motors-Fiat joint venture is facing the heat yet again, this time from Carl-Peter Forster, chief executive officer and managing director of Tata Motors Ltd.

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Forster reiterated his dissatisfaction with local sales of Fiat models under the partnership. Tata is “not happy” with the rate of Fiat sales and is considering ways to restructure the partnership, he was quoted as saying at an auto industry event in Bochum, Germany, by the Bloomberg news agency.

The remark has Rajeev Kapur, president and chief executive officer, Fiat India confounded. “I have no idea why this comment was made by Forster and in what context. We are also trying to get in touch with him and understand what restructuring he meant. As of now I am clueless,” Kapoor said.

Debasis Ray, Tata Motors spokesperson, however, said Forster was misquoted by Bloomberg and that the joint venture is progressing as per plan.

“Financially, this joint venture has been making losses and the net worth is eroding, which means that either or both the partners will have to pump in money to salvage the partnership if the situation continues,” said Mahantesh Sabarad, senior analyst, Fortune Broking.    

Fiat frets over TaMo chief quip on allianceTata Motors, which owns 50% in Fiat India Automobiles Ltd, had said during the first quarter results that it was not satisfied with the way the partnership had progressed, but was confident of turning it around.

Forster, on the sidelines of the first-quarter results conference, had mentioned that the company would be taking a strong stand in the business.

However, little seems to have changed as Fiat’s Linea and Grande Punto continue to witness low sales as compared to its peers.

The declining sales of Fiat products are a major cause of concern for Fiat and Tata Motors. Fiat sold 304 cars in India last month, 18% less than a year earlier, according to data from the Society of Indian Automobile Manufacturers. Sales from April through December totalled 15,231 cars, a decline of 15% from the previous year. In comparison, Maruti Suzuki India delivered 696,923 cars in the same period.

“The passenger car portfolio is not doing very well for Tata Motors and similar is the case with Fiat-branded cars. Except Indigo Manza, none of their products have been able to generate interest among the potential buyers. Adding to this, with limited offerings from Fiat, the JV is currently in a bad shape,” said an analyst from a domestic brokerage firm.

The perception about Fiat cars is still very poor in the Indian market. The company faced problems related to its service and spare parts. Despite having good quality products, the company is suffering to build a strong brand name.

The brand building and marketing of the Tata-Fiat products happens through the JV while the sales and distribution and after-sales are handled by Tata Motors. Fiat has now started its brand-building exercise to boost sales. The company recently engaged consulting firm Accenture for better brand visibility.

According to industry experts, the JV faces no problems on the manufacturing side, the hiccups are on the dealership side where Fiat wants to consider other options. However, Kapoor denied any such plans.

Bloomberg reported that Tata is in “positive discussions” with Turin, Italy-based Fiat about extending cooperation on making powertrains to include additional models.

The Tata-Fiat venture has a factory in Ranjangaon, which has capacity to produce 200,000 cars and 300,000 engines a year. It makes the Fiat Palio, Punto and Linea, as well as engines for Tata’s Indica small car and the Indigo sedan.