MUMBAI: Fiat Auto and Tata Motors on Thursday jointly announced an agreement for the formation of a 50:50 joint venture between the two companies following the memorandum of understanding entered into by them in July for joint manufacturing at Fiat's Ranjangaon facility in Maharashtra.

Production from 2008

The aggregate investments in the yet to be named joint venture will be made in a phased manner equally by both partners and may exceed Rs. 4,000 crore over three to four years. The joint venture will start production of engines and new cars progressively from the beginning of 2008.

With capacities to produce in excess of one lakh cars and two lakh engines and transmissions annually, the Ranjangaon plant will make vehicles for the Indian and overseas markets.

Both Fiat and Tata vehicles will be made at the facility, which will be managed by the two partners and the joint venture will have two divisions — cars and engines and transmissions. Fiat Auto will introduce its premium cars for the B and C segments, namely, the Fiat Grande Punto and the Fiat Linea, which debuted internationally at the Istanbul motor show in early November. However, a first assembly line for Fiat cars at Ranjangaon has already been commissioned for Fiat Palio and Fiat Adventure models and trial runs have already commenced.

The first batch of cars will roll out in early 2007.

Addressing the media here, Ravi Kant, Managing Director, Tata Motors, said, "While some production will commence soon at Ranjangaon, major production will take slightly more than a year to kick off.''

Speaking through video-link, Alfredo Altavilla, CEO, Fiat PowerTrain, and Senior Vice-President, Business Development, Fiat Auto, said, "the engines manufactured at Ranjangaon can be exported anywhere and there are no limits in terms of export of engines and power transmissions.''

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