Tata, Fiat to float JV for passenger vehicles, engines

Mumbai: Tata Group's flagship company, Tata Motors will set up a joint venture with Italian auto major Fiat to manufacture passenger vehicles, engines and transmissions for the both the brands. "We have just signed an MoU, working out the details and we will be signing the JV agreement soon... Both sides are keen to start it as early as possible," Tata Motors MD Ravi Kant told reporters here today. The facility will be located at Ranjangaon near Pune and have an output capacity of one lakh cars and 2.5 lakh engines and transmissions. "It will be a JV with equal participation. Its a fairly big operation that we are talking about," Kant said when asked about the investment details of the proposed JV. As per the agreement, Fiat will introduce its premium cars, Fiat Grande Punto and the new Fiat sedan and its small diesel engine. Both the companies have also been exploring opportunities and commenced a 60 day study for industrial and commerical cooperation in Latin America. The facility at Ranjangaon would be a greenfield project and both the firms are aiming to address market in India and other select geographies with combining technologies and skills. The Tata Motors plant is almost operating its maxumum capacity and its expansion is difficult. "In Pune, we are reaching the saturation level of production. We cannot extend Pune facility, so we thought of jointly creating a facility at Ranjangaon," Kant said.