Fiat ends dealership agreement with Tata Motors! Is Suzuki the new partner?

Article by Anita Panait, on May 22, 2012

Italian car maker Fiat SpA and Indian car manufacturer Tata Motors have called it quits and have terminated a six year-old dealership agreement between the two automakers. The agreement had permitted Fiat to sell its vehicles in India through Tata dealerships. Analysts at IHS Automotive and Cyrrus AS, however, said the deal’s end could prompt Fiat to move for stronger ties with Suzuki Motor.

Fiat and Suzuki have collaborated for almost ten years, and stronger ties between the two could help the Indian carmaker reinforce its presence in India, as the Japanese company accounts for around 42 percent of auto sales in India. The Asia Pacific region, excluding Japan, accounted for around 60 percent of Suzuki’s 2.56 million vehicle sales for the year ended March 31, 2012. 

The Japanese carmaker has dealers across Asia and it operates nine factories in eight countries in the continent. In return, Suzuki could take advantage of Fiat's diesel engines and network of dealers in other large markets like Brazil. Deepesh Rathore, IHS Automotive’s managing director in India, said an alliance between Fiat and Suzuki would be a win-win for both companies, adding that the possibilities are endless.

True enough, Fiat may already have its presence felt in the United States by acquiring Chrysler, but the Italian car manufacturer has yet to grab a considerable market in Asia, which only accounted for three percent of the company’s sales in 2011.

In an April 24 call with analyst, Fiat chief executive Sergio Marchionne admitted that a partnership in Asia would be beneficial. He, however, revealed that he is currently not holding any discussions with any car company in particular, but admitted that there are general discussions about collaborations. [source: Autonews]

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