Mergers, Acquisitions and Takeovers Case Study

Fiat Auto SpA – Tata Motors’ Joint Venture

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Abstract:

Fiat Auto SpA and Tata Motors had announced their joint venture to manufacture passenger vehicles, engines and transmissions for Indian and overseas markets. Fiat India’s Ranjangaon plant would be used for this venture and its plant in Cordoba, Argentina was to be used for the manufacture of Tata’s commercial vehicles which were to be distributed in Latin American and European markets through Fiat’s network.

Fiat India, with no significant sales and no new successful car launches in India, was looking for Tata’s established dealer network and would also get vehicle financing for its customers.. Tata Motors, in turn, was gaining technology, the unutilized plant capacity of Fiat and most importantly a reliable and cost effective engine for its proposed INR.1 lakh car.

The case outlines the backdrop of the Automobile industry in India, the background of these companies, their performances and the need for them to forge a venture taking the Indian, Latin American, Chinese and European markets into consideration. It also looks into the various strategies adopted by the partners to get the best out of the joint venture.

Pedagogical Objectives:

• To make students realize the strategies behind global joint ventures
• To evaluate the actual cost-benefit analysis of Tata Motors and Fiat Auto on this venture
• To understand the joint promotion and distribution network of automotive industry.

Keywords : Mergers,Acquisitions,Alliances Case Study;Tata Motors; Fiat Auto SpA; Tata Motors’ One lakh car; Strategic Partnership; Automobile marketing network in India; Automobile financing in India; Plant utilisation; New car launches; Reengineered plastic components for cars; Joint venture; Automobile marketing in Europe; Truck Market in Latin America; Technology and design transfer; Cross branding; small car manufacturing.

Contents : 
The backdrop of industry
Fiat Auto SpA
Runup to Joint Venture
Tata Motor’s performance
Fiat Auto’s performance worldwide
Fiat India’s dismal performance
Joint vision statements from Tatas and Fiat
MARKET SHARE OF CAR MANUFACTURERS
ACMA Industrial Review report