Fiat India Automobiles, the joint venture between the Indian automobile manufacturer Tata Motors and the Italian auto major Fiat is likely to be revived by the automakers in order to offset accumulated losses to the tune of Rs 300 crore. The task will be achieved by restructuring of the operations of the joint venture.
The partnering carmakers plan to utilize the amount of Rs 175.24 crore available in the venture’s securities premium balance and Rs. 124.76 crore paid-up capital to offset the accumulated losses. In terms of restructuring, a specific fee chargeable to Fiat for manufacturing the Fiat brand of cars is being considered as an option by the joint venture company.
The national sales company of the Italian carmaker, Fiat Group Automobile will now operate as an individual identity and market and sell the Fiat brand of car models. In addition, the joint venture will now start operating with a clean record after setting off its losses with a new financial year by delaying its normal financial year ending by 6 months to October 2012 for the fiscal 2011-12.
Commenting with a working capital of Rs 50 crore, Fiat Group India Automobiles Limited is in the process of setting up an independent dealer network and targets 70-90 dealerships by 2014.