Fiat to make Tata pick-ups in Argentina; alliance expands to commercial vehicles with Iveco

The industrial alliance between Tata Motors and Fiat Motor has taken another decisive step. As indicated earlier, Fiat would manufacture a pick-up truck in Argentina under license from Tata Motors. This is the first instance of a global auto major manufacturing a vehicle under license from an Indian manufacturer. Tata Motors and Fiat have signed a formal agreement for this venture, according to an official statement.

The vehicle would be the new pick-up from Tata Motors, introduced in last year's Bologna Motor Show as the TL Sprint. Fiat would assemble the model at its plant in Cordoba, Argentina. The first vehicle is expected to roll out next year and Fiat is planning to assemble around 20,000 units per year. The pick-ups would be sold in Argentina under the Fiat brand.

Fiat will introduce this model in select European and central American markets, but no timeline has been specified. The trucks under the Fiat brand would be powered by 2.3 litre JTD diesel engine made by Fiat in Brazil. The vehicle would be available in single-cab and double-cab versions with an all-wheel drive.

Tata Motors had recently entered into a JV in Thailand to assemble and market the same pick-up in that country. In the Thai market, the truck will be sold under the Tata brand and is likely to be powered by the 3 litre, or the yet to be launched 2.2 litre common rail diesel engine, from Tata Motors. The company has so far not announced any plans to introduce this model in the domestic market. However, it is expected that the vehicle would make its domestic debut by next year.

Ratan N. Tata, chairman of the Tata Group and Tata Motors said, "I am very pleased at this first step in expanding the Fiat Group and Tata relationship beyond the shores of India, and would hope this would augur well for a truly global partnership across markets and business segments."

"This agreement is a further step in the building of a large, focalised partnership with Tata and will allow Fiat to enter a specific car segment with a very competitive product. We believe in a win-win know-how exchange with our Indian partner," Sergio Marchionne, CEO of Fiat Group and of Fiat Group Automobiles said.

To explore strategic opportunities with Iveco
Tata Motors and Fiat have also announced an expansion of their strategic alliance to include commercial vehicles as well. Tata Motors has signed an MoU with Iveco, the commercial vehicles unit of Fiat Group, to analyse the feasibility of cooperation in commercial vehicles across markets. "The MoU would encompass a number of potential developments in engineering, manufacturing, sourcing and distribution of products, aggregates and components," a statement from Tata Motors said.

Tata Motors and Iveco would set up a joint steering committee to determine the feasibility of cooperation. Based on this, formal plans and agreements would be made in the coming months.

Tata Motors is the largest commercial vehicle manufacturer in the country and the fifth largest globally. The company has manufacturing facilities in Jamshedpur, Pune and Lucknow in India. Tata Motors also manufactures heavy commercial vehicles in South Korea under its fully owned subsidiary Tata Daewoo Commercial Vehicles Company and has a 21 per cent stake in Spanish bus manufacturer Hispano Carrocera.

Interestingly, Iveco held a 30 per cent stake in the holding company of Ashok Leyland – Tata Motors' biggest domestic competitor in commercial vehicles – till recently. The new generation medium commercial vehicles of Ashok Leyland are based on Iveco technology and designs. Hinduja Group, promoters of Ashok Leyland, has now fully bought out the stake held by Iveco.

"The possible strategic cooperative agreement with Tata Motors represents a new step in our strategy leveraging on excellent partnerships of Fiat Group across the automotive value chain. We are devoting great efforts and resources to explore this cooperation opportunity, on our way to change and expand Iveco in the next years," Paolo Monferino, CEO of Iveco said.

"We are truly excited about the potential of the opportunities this cooperation offers, complementing each other's strengths in products and across markets," Ravi Kant, managing director of Tata Motors said.