CASE ANALYSIS

ON
TATA MOTORS & FIAT AUTO
( JOINING FORCES )

By :
Abhishek Pawar
Sangram Pawar
Sumit Kela
Vikash Anand
Ved

INTRODUCTION :

In July 2006, FIAT and TATA motors signed a MOU.

Earlier 2006, both had signed a marketing and

distribution agreements.

Earlier 1990s TM was mostly a manufacturer of

commercial vehicles.

It entered to CAR segment through INDICA.

By, 2003 company also targeted the global market.

CONTINUE.

After World War 2, FIAT became a major manufacturer

of small cars in ITALY, and later on in Europe.

In the 1950s, the FIAT group entered into a license

agreement with India-based Premier Automobiles Ltd.
(PAL) to manufacture its car.

JV would benefit both parties: TM would gain in terms

accessibility, technology, design,, and global
presence.

FIAT will get larger presence in Indian market.

TATA MOTORS

TM was acquired by TATA sons Ltd. On June 1945

from GoI.

It was renamed to TELCO.

Initially TELCO was in commercial vehicle market.

In 1991, after liberalization, the first utility vehicle

under the TATA marquee called Sierra was launched.

In this period company had JV with various groups.

TATAS TURNAROUND STRATEGY:

Become a cost effective Organization.

Improving on internal efficiencies and restructuring its

debts.

Measures to increase its productivity.

To make a Global presence.

Increase Marketing Activity by launching various

models.

THE GROWTH STRATEGIES

BY TATA MOTORS:
Entering International Markets (Going
Global) :

Manufacturing and Supply Agreement with UK based MG

Rover Group.

Renaming TELCO as Tata Motors (TM) In Sept. 2003.

Set up operations in UAE to boost commercial Vehicles

business in West Asia.

Acquisition Of Korea Based Daewoos Commercial

Vehicle Business.

CONTINUE

Additional Investment and Market Expansion

Strategies Implemented In South Africa.

New York Stock Exchange (NYSE) Listing in

Sept. 2004.

Strategic Alliance with Hispano Carrocera SA

of Spain.

Agreement with Thai Rung Union Car Plc. Of

Thailand to target South Asian Markets.

LAUNCHING NEW PRODUCT INITIATIVES :

Created

new segment by
launching Indigo Marina.

Improved

Versions Like
Indica V2 and Sumo Victa.

Started

Prototype of
Xover (SUV) in 2005.

Highly Successful Ace :

(Mini Truck )

Introduced New Models like Safari Dicor

and Indigo SX Series .

Dream Project Of Nano

(Peoples Car)

New Approach in Commercial Vehicle

Market.

FIAT AUTO :
July

11, 1899 established by Giovanni Agnelli together

with a group of investors.
1900- First Fiat car manufacturing facility was opened
in coros Dante, Italy.
1908- Company started Exporting to USA, Australia,
France and the UK.
1911- Diversified into the production and marketing of
commercial vehicles, marine engines, trucks and
trams.
1925- It has entered the steel, railways, Power and
Public transportation Businesses.
1969- It Purchased controlling interest in Ferrari and
Lancia.
1970s- Fiat auto had plants in Italy, Poland, Brazil and
Argentina

CONTINUE :

1986- Fiat auto took over Alfa romeo , a sports car

manufacturer.
1993- It acquired Maserati, another sports car
manufacturing.
1905- Entered in India With Appointing Bombay motor
cars Agency as the sales Agent
1950s- Entered into a License agreement with PAL,
which allow PAL to manufacture the Fiat 500, Fiat 1100,
Padmini
1995- wholly owned subsidiary in India 51:49 joint
venture with PAL
The joint venture company manufactured Uno
1998- Fidis, Fiat auto subsidiary in the Auto finance
business, entered into joint venture with sundaram
Finance Ltd, to form Fiat sundaram Auto Finance Ltd.

FINANCIAL PROBLEMS AT FIAT :

In 1990 Fiat auto was in trouble it had failed to move
beyond the small car segment to the segments for
bigger cars
The Italian govt. withdraw the concessions and
subsidies given to the company and at the same time,
give foreign auto companies free access to the Italian
market
Falling sales and Increasing costs
In 1998 Fiat auto market share is decreased from 62%
to 41%.
By 2002, Fiat auto had accumulated losses of Us 2.5
billion dollar.
The Fiat group as a whole had debts of almost 33.4
billion euro.

TATA MOTORS & FIAT AUTO: JOINING FORCES:

On Sept.22, 2005, TM announced that it was

signing a MOU with Fiat Auto to explore the
possibility of cooperation across different areas in
the car market.

A 15-member joint team consisting both org was

set up to study the visibility and the specifics of the
nature of cooperation.

Both companies appeared optimistic about the

possibilities from the alliance.

In Jan 2006 the TM-Fiat Auto alliance moved

another step forward shared dealer network
in 11 cities that cover 70% of market share

Officials said that new agreements would be

reached as and when their feasibility was
established.

Fiat Autos alliance with TM took place

against the backdrop of a revival in sales in
Europe.

Fiat Auto and TM also commissioned a 60-day

study aimed at exploring industrial and
commercial cooperation in Latin America.

Moreover, the Fiat Group intended to take TMs

assistance in establishing a market for its truck
unit Iveco in India.

In mid-2006, Fiat India began using the paint

booth facility at its Kurla complex for painting
the tatamobile 207 TM picks up.

ADVANTAGES OF THE ALLIANCE :

Improved dealership network for Fiat India.

To improve position of TM in diesel passenger car

segment.

Access to next generation petrol & diesel Engines.

Compete effectively with rivals in India.

Improve TM competitiveness in global markets.

THREATS :
Competition

from other alliances like Renault SA and Mahindra &

Mahindra.
Challenge
Threat

from GM..

Problems
Brand

to TMs diesel supremacy.

for TM in European market.

Dilution for both Companies.

Entrance

of Honda , Nissan, Toyota Volkswagen and Skoda into

Indian Hatchback Car Market