Tata Motors and FIAT India Automobiles (FIAPL) have initiated a 50:50 joint venture plans for expanding their production capacity and backward integration at its Ranjangaon facility in Pune district. FIAPL has also signed an MoU with the Maharashtra government for an additional investment of Rs 2,341 crore under this expansion plan.

After attending the MoU signing ceremony, Vilasrao Deshmukh, Chief Minister of Maharashtra said that with investment by FIAPS, the total committed investments that Maharashtra has obtained in the past two years comes to around Rs 1,19,000 in 95 mega projects.

CEO Rajeev Kapoor informed that the joint venture with Tata motors will surely boost the sale of FIAPL’s two B and C segment cars- Grande Punto and Linea which will be released from Ranjangaon plant in the next couple of months.

He disclosed that at present the plant is producing one lakh cars and 2 lakh engines. But the capacity of the plant will be increased in days to come. We have planned to produce at least 2 lakh cars, 3 lakh diesel engines and 3 lakh spare parts and accessories per annum from this plant by 2012.

He also said that the plant would also involve in manufacturing Fiat’s 1.3 litre multijet diesel engines, 1.2 and 1.4 liter fire gasoline engine and the C549 transmission ones. Plant would also focus on manufacturing Tata passenger and next generation cars, he added.

Speaking on the occasion, Tata Motors managing director and FIAPL chairman Ravi Kant made it clear that FIAPL have no plans to use the expanded Ranjangaon facility to manufacture Tata’s Rs 1 lakh car, the Nano.

The investment in this facility will also lead to the increase in about 1,000 direct jobs. With this the entire employment potential of the plan has been pegged at 4,000 including both direct and indirect jobs.