The announcement has finally come. Fiat and Tata Motors have announced the break up of distribution pact in India. Fiat will setup its own dedicated sales and service network under a separate Fiat Group owned company, which will be formed for this very purpose. This break up of sales and service has been a long time coming and Fiat has finally realized it cannot survive by selling cars through Tata dealers, which don’t promote Fiat cars as much as they promote Tata cars.
This break up of distribution and service responsibilities between the two companies is only good news for existing and future Fiat customers. Fiat will setup atleast 20 new dealerships across major cities in India by the end of this year. No date has been declared regarding the stoppage of distribution of Fiat cars through exisiting Tata dealerships yet. Tata Motors will continue to partner Fiat in manufacturing, while Fiat will continue to supply diesel engines to both Tata Motors and Maruti Suzuki.
Fiat cars are one of the best in their segment with the only fly in the ointment being the service and sales support. With this said to be addressed soon, one can expect more people to buy Fiat cars, in turn increasing the Italian car makers market share. Increased market share will make Fiat bullish and launch more cars in the Indian market. Thus everybody wins in the process. The 178 exiting Fiat-franchised Tata dealers in 129 cities will be encouraged to start independent Fiat dealerships.
