Tata, Fiat set up feasibility study team

Tata Motors and Fiat SpA has set up a 15-member joint team consisting of senior officials from both organisations to study the feasibility and specificity of cooperation between the two partners.

Last week the two companies had signed a memorandum of understanding (MoU) to analyse the feasibility of co-operation, across markets, in the area of passenger cars that would encompass development, manufacturing, sourcing and distribution of products, aggregates and components.

In a related development, Fiat India's managing director Paolo Castagna has submitted his resignation at the company's board meeting held on Wednesday, said sources close to Fiat.

Fiat India was not willing to comment on the specific factors that led to the resignation. It also was tightlipped on media reports which suggested that the company would shut down its India operations.

"An announcement regarding this would come from Fiat's parent in Italy in a week," said a Fiat India spokesperson. Automobile sector analysts said the alliance would help Fiat in reducing its manufacturing cost in India and Tata Motors in gaining access to latest designs and technology from the Fiat stable.