Fiat and Tata Motors have said they will end their distribution contract in India and the Italian carmaker will handle the business itself under a new separate Fiat Group-owned division that it will establish to handle all commercial and service related activities from the current Tata-dedicated team. Tata has been handling the service and selling of Fiat vehicles in the country since 2006 through joint Fiat-Tata dealerships.
Fiat sold more than 16,000 cars in India in the fiscal year ending 31st March, a 24% drop in sales on the previous year, and is eager to find renewed growth in Asia's second largest car market. It has said it will manage control of its commercial and distribution activities, and set up its own car dealer network, "to further develop the Fiat brand in India".
The carmaker wants to introduce more of its own brands, including the Alfa Romeo and Chrysler's 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 companies said in a statement.
The two carmakers will, however, continue to produce vehicles, engines and transmissions at their 50:50 joint venture plant in Rajangaon in the west of the country - Fiat India Automobiles - which began production in 2007. Fiat makes the Punto and Linea models at the plant, alongside Tata products and signed a further deal with Maruti Suzuki at the beginning of the year for engine supply.
Elsewhere in India, Volkswagen's division there has announced it will import and distribute Porsche models in the country, a service handled by Precision Cars since Porsche introduced its vehicles to India in 2007. Precision Cars will continue as the dealer group for Porsche sales in the country.
The new arrangement will also include aftersales services based on its network of workshops in the country.
Porsche offers five models on the Indian market: the Panamera, Boxter, Cayman, 911 and Cayenne, with the latter SUV proving to be the most popular. As part of the relationship with Precision Cars the carmaker distributes the vehicles in Ahmedabad, Bangalore, Chandigarh, Hyderabad, Kochi, Mumbai and Delhi. However, VW plans to work with Porsche on reaching more locations.
