Case †HBS: Fiat †Tata Essay

1 What is guilds current situation in India? rescript is an Italian machinemobile manufacturer based in Turin.  rewrite India in Indian car merchandise is facing the dilemma of scummy sales. It had a very niggling food market share in India analyse to separate existing railroad carmobile competitors. There was a full and huge relationship with Tata Motors in Indian so social club and Tata were going to occupy a interchangeable bet on (JV) to manufacture passenger cars, engines and transmissions for the Indian and oversea markets. These two companies began to seek for collaboration in early 2005. From the Exhibit 2 Production by Manufacturer, we can see rescript in 2006 be 11 in worldwide auto industry while Tata stood in 21, which had merely Indian market. For rules of order this brand, it had a high brand sensation in India which is a good sign for them want to expand market there and Fiat excessively had the best diesel engine for small cars.2 What is the b usiness opportunity in India? Do you think that Fiat needs a partner? In an strain to lower costs, near major automotive makers had set up factories in emerging markets much(prenominal) as China, India and South America. Because lower production costs were one incentive, experts also suggested that car makers could crystalise access to growing and fertile marketplaces that is the background for auto manufacture in India. The liberalization policies in 1991 opened up India to untried import and export possibilities. To encourage investments, the government launched series of new policies in 1990s to encourage growing their economics. For vehicle industry, there was total macrocosm of 1.1 billion people in India which is an obvious voltage opportunity for auto makers.I think Fiat really needs a partner. The bring down at that clipping was all manufacturers with production greater than one million vehicles were involved in one or more alliances with other producers. move ma nufacturers formed alliances for a variety of factors with the primary rationale being an attempt to reduce labor, energy, and raw material costs. So combining same value-chain activities to gull efficiencies, merge talents and share risks is a good choice. Observers lauded the tie-in stating that Fiat had the potential for more 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 like they make for good partners. They knew each other well before they wanted to committee themselves into joint venture. In 2006, they were both financially sound due to the good co-operation. At that time sourcing of parts usually involved 30 trail suppliers as well as 70 or more indirect suppliers (who served the direct suppliers). Automobile manufacturers usually established long-term relationships with their suppliers and inv olved suppliers in the evolution of new models. Fiat and Tata they examined synergies in overseas to give marketing support.With help of Tata, they can improve Fiats dealership network and client 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 future which is a win-win situation. Compared with the Fiat-GM relationship, Fiat and Tata king have better future. After Fiat and GM cooperation, their market share was decreased and had high debts issues. GM themselves were making losses and melt down the agreement of Groups auto business. There was no assimilation collaboration which do it crucial for long term relationship.4 How would you value the negotiation process between Fiat and Tata? It was a long guidance communication before Fiat team came to Tatas head touch and came into negotiation but however better than longer 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 some manufacturing parts like passenger cars, power trains, engines and transmission for India and overseas. They focused on the spirit of relationship and memorialise the prospects for long-term relationship. Most major components were negotiated. However, It was obvious that some culture distinction appeared during their negotiation.There are two layers of culture raised by a Fiat executive first is Italian and Indian culture and the sulphur is the difference in company culture. Even with another Italian company, Fiat can be very different. And some problem appeared like It is  ceaselessly 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 then starts at 11am and might end up being regularly interrupted by other issues. But some complain cannot be very serious in their negotiation.