Posted May 24th 2012 10:58AM
Fiat and Tata has reportedly stepped away from a tieup in the Indian market that saw Fiats being built in India, using engines shared with Tata and Maruti models, and being sold through Tata dealers. Neither company commented, but according to analysts, the issue was that in addition to Tata was simply too busy with its other endeavors, especially Jaguar Land Rover, to attend to the Fiat deal. Sales of the joint-venture vehicles have declined by more than 20 per cent year-on-year.
The Fiat-Tata union isn't binding, and talk has now centered around Fiat snuggling up with Suzuki. Suzuki has a huge position in Asia, Suzuki-Maruti being India's largest carmaker and the Japanese firm having sold more than half its cars in the Asia region, excluding Japan, over the year that ended March 31. Fiat, on the other hand, only sold three percent of its wares in Asia in 2011.
There is debate about how beneficial a Fiat-Suzuki tieup would be. Suzuki's position is facing pressures, but some observers say the Japanese firm has all the strengths and, at most, would benefit from "a timely supply of engines," but possibly confuse customers by adding Fiat to its distribution channel. Others think that it would be a good union, with Fiat providing "a sound name" and a technology exchange.
Such a venture would rely on Suzuki extricating itself from its still-binding union with Volkswagen, an adventure that has probably soured Suzuki on the phrase "technology exchange" for a bit. Among the problematic issues, Suzuki has accused VW of breach-of-contract by not sharing VW technology and not initiating any of the joint projects that were Suzuki's reason for the deal. Suzuki and Fiat presently collaborate on the Fiat Sedici/Suzuki SX4, and when Suzuki bought diesel engines from Fiat instead of VW, the German company accused the Japanese automaker of breach-of-contract. Both parties are in arbitration over the matter; last we heard, Suzuki wants its 20-per cent stake returned, while VW is still in favor of the partnership. A VW victory would nix the kind of Suzuki deal with Fiat being speculated now.
Click here to watch a video of the Suzuki Seduci.