Fiat Ends Distribution Tie With Tata in India image

Fiat ends a six-year partnership with Tata to create its own car dealer network in India to grow sluggish sales.

On Wednesday, May 2nd, Fiat declared that the move would help its business in India, a booming market where foreign producers such as Ford, Honda and Nissan have planed to take more control of their own operations. Fiat sells 20,000 units annually in India and plans to make massive investments in developing its dealer network there, to reach the European and the U.S. competitors in high-growth Asian markets.

Fiat aims at setting up a company to sell its models and build on the network of Fiat-Tata dealerships. The company is pretty well settled in India, with its 1100 sedan which was sold under license in India from the mid-1950s to 1997, first as the Fiat 1100 Delight and then as the Padmini. Now the model is mostly used as a taxi. Currently the company sells the Linea, Palio and Punto models in India and plans to launch more models including the Alfa Romeo, Chrysler, Dodge and Jeep.

“Development of the new Fiat dealer network for India will start progressively and the 178 existing Fiat-franchised Tata dealers in 129 cities will be encouraged to form the foundation of the future network,” the company said in a statement.