Automotive Industry sources all seem to think that Tata Motors Limited’s bid for Jaguar and Land Rover should succeed. However, if Tata Motors does win the prize, then we believe that Fiat Group Automobiles S.p.A. (FGA) may not only be entitled to claim some of the credit but might also stand to gain considerable benefit from the transaction.
FGA was originally named by Automotive News Europe (ANE) as one of six potential bidders for Jaguar and Land Rover in August, 2007 but did not, in the end, submit an indicative bid. Indeed, FGA has since, reportedly, been advising Tata Motors on that company’s bid for the two British marques. However, AR reckons that FGA’s discussions with Tata Motors may well have extended beyond advice to an evaluation of the potential for a Joint Venture between FGA and a Tata Motors-owned Jaguar and Land Rover.
FGA and Tata Motors have, of course, already concluded an Indian JV agreement which was signed on the 12th October, 2007. The still, apparently, unnamed JV company’s manufacturing base at the FGA plant at Ranjangaon in the State of Maharashtra, India has the capacity to produce in excess of 100,000 cars per annum and 200,000 engines and transmissions per annum. Three Fiat models and one Tata model will be manufactured at the facility while all the Fiat-branded cars built there will be distributed in India by Tata Motor’s Fiat-Tata dealer network which will expand to 100 outlets by mid-2008.
FGA currently produces the final version of the ageing Fiat Palio at Ranjangaon and should start production of the B segment Fiat Grande Punto and C segment Fiat Linea there during Q1 or Q2 2008. The engines manufactured at the plant will include the 1.2- and 1.4-litre FIRE petrol engines and a 1.3 Multijet diesel engine which will, according to the Chairman of Tata Motors, Ratan Tata, enable his company 'to access world-class powertrains from Fiat for its next generation car offerings.'
FGA is collaborating with Tata Motors on the latter’s Rs 1-lakh car and the two companies are also reportedly co-developing Fiat’s replacement for the ten year old Fiat Palio range. India’s Economic Times reported an informed source as saying: 'The Palio will need a replacement and the JV has already started work on the development of the new small car.'
The newly appointed President and CEO of Fiat Automobiles India Limited, Rajeev Kapour, was recently quoted in India’s Business Standard as saying: 'We may increase the (Ranjangaon) plant’s production beyond 200,000 cars and 300,000 engines and transmissions annually.' The Indian business media has also suggested that, in addition to the distribution and marketing of the Fiat Palio (and any replacement), the Grande Punto and the Linea, Tata Motors may also be planning to import FGA’s portfolio of prestige marques namely Alfa Romeo, Ferrari, Lancia and Maserati and market them in India.
FGA and Tata Motors have, then, already developed a very close commercial relationship but a clear inference that the two companies are ready to explore further opportunities for cooperation emerged when FGA’s CEO, Sergio Marchionne, was recently interviewed by ANE’s Chief Correspondent, Luca Ciferri. Ciferri asked the Italo-Canadian Marchionne why FGA had considered and then rejected the idea of bidding for Jaguar and Land Rover. Marchionne replied: 'We were attracted by a number of things. The most noticeable being Land Rover’s distribution network and Jaguar’s platforms and powertrains, which we would have used to make top Alfa Romeo models with front longitudinal engines and rear-wheel drive.
'At the same time, we felt we would not be able to manage the Jaguar and Land Rover brands while also leading the proper execution of the Fiat Group Automobiles relaunch plan. We remain open to talks with the future owner of Jaguar and Land Rover about possible cooperation.'
AROnline therefore, has little or no doubt that, if Tata Motors emerges as Jaguar and Land Rover’s new owner, the talks mentioned by FGA’s Marchionne will be pretty high on the two companies’ agendas. We certainly reckon that there would be plenty of scope for platform sharing in such a scenario. The lighter, reengineered, MY10 version of Alfa Romeo’s Premium platform might, perhaps, underpin Tata Motor’s rumoured C and/or D segment contender(s) while, if last week’s various First Drive reports are accurate, the Jaguar XF’s platform seems to tick all the boxes dynamically and so would probably be a good basis for the somewhat delayed Alfa Romeo 166 replacement, Project 941 (subject to the resolution of some potential packaging issues).
Indeed, given that Ford Motor may well retain a significant stake in a Tata Motors-owned Jaguar and Land Rover, already has what amounts to a JV with FGA at Tychy in Poland for the manufacture of the forthcoming Ford Ka and that Sergio Marchionne told ANE’s Luca Ciferri that, 'mid to long term, I have no doubt we will have to produce in the NAFTA area to sell at a profit in the US,' AROnline believes that there must also be scope for Ford Motor to participate in any further FGA/Tata Motors JVs in either the Americas or Europe.