Tata Motors and Fiat to invest Rs. 3000 Crores in a joint assembly line for SUVs

The latest partnership in the Indian automotive sector is between two auto majors, Tata Motors and Fiat. The two companies are planning to set up a joint assembly line specifically for producing SUVs. According to Economic Times, Tata and Fiat will be investing close to Rs. 3000 crores for the project.

Tata Motors and Fiat partner to invest in joint assembly line for SUVs

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The expected annual capacity of the new production line is around 1 lakh cars per annum and Tata Motors will be looking to manufacture two SUVs that go by the codenames Q501 and Q502, while Fiat will roll out the upcoming Jeep range of products from the line. The investment will be carried out in Fiat’s plant in Ranjangaon, Maharashtra. Fiat and Tata already have a 50:50 joint venture in the same plant for manufacturing the Linea, Zest and Bolt respectively.

Fiat previously was in a joint venture with Tata Motors for a joint distribution network, a back-end support system and co-manufacturing of products including engine and technology sharing with Tata. This venture for distribution came to an end on 31st March 2013 and many experts in the industry feel that Fiat’s decision to end the joint venture was a big mistake and as a result, Fiat’s run in the Indian market took a massive blow.

In the meantime, car sales grew for the second consecutive month in May by 7.7 percent, while the growth stood at 18 percent in April. The industry is hoping for the monsoon season and also the lowering of interest rates to get sales going forward. According to information from the Society of Indian Automobile Manufacturers (SIAM), 1, 60,067 cars in total were sold last month. The growth was largely achieved thanks to Maruti Suzuki, Hyundai and Tata Motors. Sales for Mahindra, Toyota, Nissan, General Motors and Ford declined in May 2015 and nine of the total sixteen car companies posted lower sales.