To further develop its brand in India, international automobile major Fiat Wednesday said it will form a new company to handle distribution and service activities of its Indian subsidiary which operates in partnership with Tata Motors.
The two-companies had formed the joint venture in 2006 under which Tata Motors was managing distribution and servicing responsibility of Fiat cars in India through joint dealerships.
"Fiat and Tata have agreed that, in order to further develop the Fiat brand in India, management control of Fiat’s commercial and distribution activities will be handed over to a separate Fiat Group owned company," a company statement said.
"Tata Motors will hand over the distribution and service responsibility for Fiat cars in India to a Fiat Group owned company being formed for this purpose."
However, the company maintained that the JV's manufacturing activities and assets will continue in the same manner.
The JV has a manufacturing plant in Ranjangaon, Maharashtra, which produces cars and powertrain engines for both Tata Motors and Fiat.
Earlier, the company had said it was targeting to open at least 22 standalone Fiat showrooms across India. The move will provide Fiat cars to have exclusive place in the showrooms. At present, Tata and Fiat cars are sold through the same dearlership.
The company added that the 178 existing Fiat-franchised Tata dealers in 129 cities will be encouraged to form the foundation of the future network.