Fiat enticing Tata

                                                                                         

So the biggest qualified rumour in the market? That the Fiat Group has initiated discussions with Tata Motors and has offered Fiat Auto to be sold to Tata Motors. So what's new? Considering that Fiat and Tata have been acting as a couple who have found love on the rebound in each other, this was bound to happen. Wait a minute! Holy cow! Its not Fiat India but the whole of Fiat Auto which is being offered.

So will Tata bite? Very unlikely. Or even if they do bite, it would be a difficult thing to chew - its more like asking a six year old to take a bite of a six layer jumbo club sandwich. But hey, the club sandwich sure looks appealing.

Fiat was on its way back up but that's akin to saying they had again reached the base camp of Mt. Everest after slipping from the peak. The Fiat management in Italy obviously reckons that letting go of Fiat Auto is in the best interest of the group and brilliant Panda and Grande Punto are perhaps good enough high points to sell off.

So will Tata buy it. Well, the company is already stretched in the INR 100,000 car project and taking over Fiat may be a huge stretch on resources. But Tata-Fiat can always experiment with a stretched contract and transfer of Fiat Auto over five years starting with the shifting of production and component sourcing attributes to Tata.

About the author:
Deepesh Rathore
Research Editor
deepesh.rathore@supplierbusiness.com
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