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Fiat and Tata can make a good partner to each other. They knew each other well before they wanted to commit themselves into joint ventures. In 2006, they were both financially great due to the good co-operation. At that time sourcing of parts usually involved 30 direct suppliers as well as 70 or more indirect suppliers. Automobile manufacturers usually establish long-term relationship with their suppliers in the development of new automobile models. With the help of Tata, Fiat can improve their dealership network and customer service. This helps to cut manufacturing cost and they can compete effectively against competitors. For Tata, this alliance with Fiat helps Tata to get better technologies and new designs in the future. It is a win-win situation. Compared with the Fiat-GM relationship, Fiat and Tata might have a better future together. After Fiat and GM’s cooperation, their market share was decreased and had high debts issues. GM themselves was making losses and thus dissolves the agreement of Group’s auto business. There was no culture collaboration which made it crucial for long-term relationship. Given its low percentage in terms of market share, Fiat will definitely need a partner to improve its revenue in India. A good example is a company that has a huge stake in the Indian market. It also needs a company with a well-organized distribution system to enable it penetrate every corner of this market. Moreover, this company should have an understanding of this market and its demands. It will enable a foreign company like Fiat to sail smoothly in this region with little difficulties. As a result, Fiat needs a partner to take advantage of the business opportunity in the Indian market. Without a partner that understands this market, the company will take long to settle in the country and miss emerging opportunities.

Post Author: admin