Tata, Fiat in talks for sharing platforms in foreign markets

Tata Motors is in talks with Fiat for sharing its vehicle platforms with the Italian company in select overseas markets.

However, the talks do not include the company's Rs 1-lakh small car project, which is expected to be commercialised in 2008.

Confirming the development, a Tata Motors spokesperson said: "The two companies are engaged in advanced discussions on projects, as already announced, and some preliminary discussions have been held on possible sharing of our platforms with Fiat for select overseas markets. These did not include the small car."

A Reuters report from Venice quoted Fiat CEO Sergio Marchionne as saying that his company was studying the option of developing a low-cost car with its Indian partner, Tata Motors. "It will be in the short-term as they have already done most of the work," Marchionne said.

Tata Motors and Fiat had signed an umbrella agreement in September 2005, under which they had agreed to look at the feasibility in all areas of cooperation between the two giants in India and abroad in the automotive sector.

To begin with, the two companies agreed to set up a joint dealership network in India, which would sell both Tata as well as Fiat cars like Palio and Adventure.

On July 25 this year, Fiat and Tata Motors signed an MoU to establish an industrial JV to manufacture passenger cars, engines and transmissions for India as well as abroad. The unit, which was to be set up in Ranjangoan, would have the capacity to make 100,000 cars and 250,000 engines and transmissions.

Both Tata and Fiat vehicles would be made in this facility. For Tata's small car, the company has already decided to set up its manufacturing facility in West Bengal. It also hopes that once the market matures, it would sell over 1 million small cars across the country.