Case †HBS: Fiat †Tata Essay

1 What is rules of orders veritable situation in India? parliamentary procedure is an Italian automobile manufacturer base in Turin. ordering India in Indian car commercialise is lining the dilemma of poor sales. It had a real small market character in India comparing to other existing automobile competitors. in that respect was a nigh(a) and long relationship with Tata Motors in Indian so Fiat and Tata were going to have a joint venture (JV) to manufacture rider cars, engines and transmissions for the Indian and overseas markets. These two companies began to seek for collaboration in primal 2005. From the Exhibit 2 Production by Manufacturer, we can see Fiat in 2006 ranked 11 in worldwide auto assiduity while Tata stood in 21, which had merely Indian market. For Fiat this brand, it had a spicy brand awareness in India which is a good sign for them requisite to expand market at that place and Fiat also had the best diesel engine for small cars.2 What is the business op portunity in India? Do you think that Fiat involve a partner? In an cause to lower cost, most major automotive makers had set up factories in emerging markets such as China, India and South America. Because lower production costs were one incentive, experts also suggested that car makers could gain access to growing and potent marketplaces that is the background for auto manufacture in India. The liberalization policies in 1991 assailable up India to new import and export possibilities. To encourage investments, the government launched series of new policies in 1990s to help growing their economics. For vehicle industry, there was total population of 1.1 billion people in India which is an obvious potentiality opportunity for auto makers.I think Fiat really needs a partner. The trend at that time was all manufacturers with production great than one million vehicles were winding in one or much alliances with other producers. Automobile manufacturers formed alliances for a va riety of factors with the primary rationale being an attempt to reduce labor, energy, and raw material costs. So trust same value-chain activities to gain efficiencies, merge talents and share risks is a good choice. Observers lauded the tie in stating thatFiat had the potential for much sales in the burgeoning Indian market while Tata stood to gain technology and new export markets.3 Do you think Fiat and Tata make for good partners? Compare the Fiat-GM relationship with the Fiat-Tata relationship. It looks alike they make for good partners. They knew each other well before they valued to committee themselves into joint venture. In 2006, they were both financially sound collectible to the good co-operation. At that time sourcing of move usually involved 30 direct suppliers as well as 70 or more indirect suppliers (who served the direct suppliers). Automobile manufacturers usually cleared long- experimental condition relationships with their suppliers and involved suppliers in the development of new models. Fiat and Tata they examined synergies in overseas to take back marketing support.With help of Tata, they can improve Fiats dealership network and customer service, help to cut manufacturing costs and compete effectively against competitors. For Tata, this alliance with Fiat helped Tata get technologies and new design in futurity which is a win-win situation. Compared with the Fiat-GM relationship, Fiat and Tata efficiency have better future. After Fiat and GM cooperation, their market share was decreased and had high debts issues. GM themselves were reservation losses and dissolve the agreement of Groups auto business. There was no culture collaboration which made it crucial for long term relationship.4 How would you assess the negotiation process between Fiat and Tata? It was a long way communication before Fiat team came to Tatas head office and came into negotiation but still better than long-lived waiting time for visa. I think they made a good conversation and made a lot of efforts like signing MoU to establish joint venture and equity structure. Made agreement to about manufacturing parts like passenger cars, power trains, engines and transmission for India and overseas. They focused on the whole step of relationship and show the prospects for long-term relationship. Most major components were negotiated. However, It was obvious that some culture difference appeared during their negotiation.There are two layers of culture embossed by a Fiat executive first is Italian and Indian culture and the second is the difference in company culture. Even with other Italian company, Fiat can be very different. And some job appeared like It isalways difficult going to the other companys offices as they still have other work to attend to. So, we might have a meeting scheduled to start at 10am, which past starts at 11am and might end up being regularly fitful by other issues. But some complain cannot be very serious in the ir negotiation.