Fiat is divorcing Tata and wants to get closer to Suzuki

It will have been six years in 2012 since the Italian and Indian brands decided to collaborate and share the same sales points in the Asian country. But their alliance will no longer last, following the newly announced decision of both to end all commercial relations. This arrangement, which had begun as an attempt by Fiat to penetrate the Indian market further, has not proven as profitable as the Italian company had intended.

In addition to using Tata’s 178 dealerships to sell its vehicles, Fiat was also able to build some models alongside the Indian brand at its Pune plant, in western India. But of the 200,000 vehicles that left that plant, until March 31 of this year they had sold no more than 16,037, 24% fewer than in 2011. Nevertheless, despite the separation, joint production of models and engines will continue for now for a while.

Having returned to Asian singledom, Fiat is urgently looking for a new partner. And coincidentally, India’s most important manufacturer, Suzuki in its alliance Maruti-Suzuki, is in the process of another divorce from Volkswagen. Analysts at Indian consulting firms in the domestic industry, Cyrrus and IHS Automotive, regard this as a clear intention to draw closer.

Both companies have collaborated for more than ten years in various fields, but that does not spare them from an alliance that is still complicated. The benefits would be mutual: Suzuki could temporarily take advantage of Fiat’s Diesel Multijet engines for its Indian models, while for Fiat the expansion in Asia comes at a very good time to keep increasing its share of the Chrysler Group.

The problem is that Suzuki does not really benefit from sharing dealerships, as according to analysts it could confuse Indian consumers. And we must not forget that Volkswagen, which still owns 20% of Suzuki, will never agree to let the Japanese company lay its hands on Italian technology. But given that the Fiat Group currently sees its best figures as Chrysler and not as the manufacturer that gives it its name, it is high time the Italian company found a new goose laying golden eggs outside Europe. Could Suzuki be to Fiat what Chrysler has been to the group?

Source | Automotive News