FIAT-CARNATION STRATEGIC ALLIANCE MAY ANNOY TATAS

Jagdish Khattar’s Carnation Auto has announced a strategic alliance with Fiat group company Magneti Marelli on Thursday. Carnation will now service top Fiat brands like Ferrari, Maserati, Alfa Romeo and Lancia in the after sales market. This Carnation-Fiat arm tie-up may irk Tatas which partnered with Fiat and plans to introduce these marquee brands in India through its own dealer and service network. Carnation Auto MD Jagdish Khattar said: “I don’t see any conflict of interest with Tata Motors because the agreement has been approved by the top management of Fiat.” On this tie-up the Tata Motors spokesman said: “We cannot make any comments because we are unaware of the nature of the agreement (between Carnation and Magneti Marelli).”

As a part of its partnership with Fiat, Tata Motors currently distributes Fiat-branded cars in India like the Fiat Linea, Fiat Grande Punto, Fiat Palio and the Fiat 500 . According to the people close to the matter there is no carte blanche that Fiat should consult Tata Motors for all their brands and should have to use the Tata Motors channel. The issue here is with Fiat 500, which Tata Motors is currently both selling and servicing.

This strategic alliance covers after sales and service of a range of premium (Rs 10 lakh and above) car brands, including the Fiat range. In the first phase, Carnation will offer nationwide workshops through which Magneti Marelli will target after market sale of spare parts of premium vehicles. In the second phase, the Italian company will help Carnation source components from its own joint ventures in India and outside India as well as from third parties.

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