After more than six years, Tata Motors will stop selling and servicing Fiat SpA’s cars in India.
Fiat took the decision as part of a realignment process. It is officially confirmed that the Fiat will set up its own sales, marketing, and service units across India and market its own products.
However, the move could pave the way for Fiat to strengthen its ties to Japan’s Suzuki Motor Corp. (7269) in Asia’s third-largest auto market, analysts at IHS Automotive and Cyrrus AS said.
The idea is that Suzuki, which accounts for over 40 percent of auto sales in India may benefit from Fiat’s position in markets such as Brazil – Latin America’s largest economy. On the same time, Fiat can increase its presence in Asia, a market where the Italian automaker accounted for only 3 percent in 2011.
In addition, Fiat plans to open 20 exclusive dealerships in India this year, and may setup a new company to sell its models in India.
“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.