Tata Motors and Fiat Auto Essay

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Tata Motors and the Fiat Auto: Joining Forces Fiat auto is an Italian automotive company that produces Fiat branded cars. The company mainly sells its vehicles in Europe and Asian markets. However, the company was faced with financial crises during late 1990s and early 2000s that contributed to decrease in sales, poor quality control and poor image of the company. To sustain its business, the company decided to restructure its business strategy and decided to enter Indian market. This was facilitated by forming a joint venture in 2006 with Tata, one of the leading automotive manufacturers in India. Tata Motor has it headquarter in Mumbai India and mainly focuses on manufacturing and sale of commercial vehicles, such as trucks, buses, coaches, vans, military vehicles, and construction equipments and vehicles. The company also has a small division, which manufactures passage cars that were introduced in late 1990s. Since Tata is well established in India, a joint venture will help Fiat to enter Indian easily and benefit from the large emerging market for small cars (Gupta, & Shekhar, 2010). Business Opportunity in India There were several opportunities in India automotive market that led to the two automobile companies to form a joint venture between Tata and Fiats. One of the biggest opportunities in India is a high population. According to the survey, India is the second largest populated country after china. The country also has a high number of middle-class individuals who account for about 170 million. This class of people provides a good market for small passenger cars and, therefore, the joint venture targeted to utilize this opportunity. India has also been cited to have reliable and cheaper suppliers in terms of raw material components and labor. Focused on the cheap labor and availability of raw materials when entering Indian market. It is argued that if

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