The proposed tie-up between Fiat Italy and the Indian service company Carnation (of Jagdish Khattar) is in the offing. Under this pact, Carnation will take care of vehicles belonging to Magneti Marelli – Ferrari, Alfa Romeo and Lancia. This pact raised many eyebrows in the industry that Fiat has a tie-up with Tata for promoting marquee brands in India including sales and service.
While Khattar expressed hopes of minimized conflicts in the Tata sector, the latter circles did not comment on the scheme. The chairman of Tata Ratan Tata had earlier expressed his willingness to deal with Fiat for its lorry segment Iveco and Ferrari and Maseratis, in addition to taking Nano to Latin America. The Indian deal between Fiat and Tata is currently doing with Linea, Grande Punto, Palio and Fiat 500 apart from JVs for manufacturing passenger cars, engines and transmissions.
Tata is shouldering the marketing of Ferrari and Maserati in India but Fiat is in no way dependent of Tata for launching any alternative or additional business in India. The issue is on the perusal of Tata circles, say sources close to Tata. In the meantime Carnation has got full deployment activity of servicing the premium range of brands, cars costing more than Rs10 lakhs, along with Fiat range. Under the agreement, Carnation will install countrywide service centres and workshops from which Magneti Marelli will carry on sales of parts and servicing the cars. Once settled, the JV will lead to the component sourcing for Carnation in India and overseas.
All that Magneti intends now is to establish its strong hold through Carnation JV, since the company has doubled its presence in the last two years, said its CEO. Magneti was in search for a leading company for this sort of tie-ups, and Carnation seemed to be an ideal one for offering global quality of service in India. Magneti is keen on its growth in the potential Indian automotive industry. Carnation, to run its show, has accrued Rs108crore form Marquee investors Premlinvest and FCI Ventures.
In addition, the company has got a financial assistance from Punjab National Bank through debt fund amounting Rs170crore for erecting multi-brand auto solution hubs.