Tatas, Fiat to announce deal today

Four months after signing a memorandum of understanding, Tata Motors will tomorrow announce the area of its mega alliance with Fiat SpA.

Source said the announcement would be in line with the recommendations of the joint team. Both the companies constituted a13-member team to chalk out the feasibility and nature of co-operation for developing, manufacturing and distributing passenger cars across markets.

Auto analysts speculated that the tie-up is going to be manufacturing and distribution of Fiat cars in India by Tata Motors and in return Fiat providing Tata Motors with the latest designs and technology.

"In another two to three years, the Tata firm will face intense competition from leading automobile players such as Toyota, Renault, Nissan and General Motors. In addition, the Maruti-Suzuki combine is all set to enter the diesel market, which is the mainstay of Tata Motors today. The proposed alliance will be more intense on the technology front, especially in the area of diesel engines. An alliance with Fiat will really come handy, especially since Maruti-Suzuki is set to start production of Fiat's common-rail diesel engines from a new plant near Manesar in Haryana," said an analyst

The alliance opens many doors for the two companies. Analysts said Fiat India might set up the Ranjangaon facility near Pune with the help of Tata Motors. Tata Motors, on the other hand, would try and enhance its presence in developing markets using Fiat's global distribution and retail network, the analysts said.

Fiat has tie-ups with PSA Peugeot Citroen and Suzuki, and has recently signed an MoU with Ford Motor. These alliances are strategic to Fiat's plans of becoming a profitable carmaker once again after suffering losses for the past few years.

Buys German firm

Tata Motors has acquired Cedis Mechanical Engineering, a Stuttgart-based provider of automotive engineering and design services.

Wolfgang Zoefgen, managing director "� European operations, Incat, said "This expands the presence of Incat in Germany, and in Europe overall, with proven competencies in engineering and design, as well as in Catia support."

Tata Technlogies, a wholly owned subsidiary of Tata Motors, is the promoter of Incat. "Further, this acquisition - as well as the company's 2005 acquisition of Rand France S.A. - diversifies the Incat client base and positions Incat to widen its PLM consulting and support services offerings".