Close [X]

End of the road for Fiat-Tata Motors distribution tie-up

img

Six years after Fiat agreed to sell its cars through Tata Motors dealers, the Italian auto maker has decided to call off its distribution and commercial alliance and go solo in India.

Despite the alliance, the Italian car maker failed to push its sagging sales in the country. It has only 0.6 per cent share of the domestic car market. The company currently sells only two vehicles: Grande Punto in the hatchback and Linea in the sedan segment. Last financial year, the company’s sales saw a slide of 24 per cent at 16,073 units as against industry growth of five per cent.

Fiat will now set up a new subsidiary company in India to look after sales, distribution and service of its own cars. This company will be directly controlled by the Fiat Group. Till now, the distribution and after-sale service responsibility of Fiat-branded cars was in the hands of Tata Motors, India’s largest auto maker.

Fiat, which currently sells cars through 178 franchised Tata Motors dealers, will encourage them to form the foundation of its future network. The dealers will be encouraged to join the Fiat fold. A Fiat India spokesperson clarified that though no stand-alone outlet selling Fiat cars was currently operational in India, the development of the new Fiat dealer network would start progressively.

In September last year, the two partners had made the first rejig in their distribution alliance. Under that, Fiat identified 20 cities in which its cars would be sold independently.