Italian car manufacturer Fiat is to establish its own car dealer network in the Indian market to grow lethargic sales, terminating a six-year distribution contract with Tata Motors .

Fiat stated that the move should aid build its biz in the Indian market, a thriving market where foreign producers such as Ford, Honda and Nissan have recently acted to take extra control of their own functioning.

Fiat, which sells 20,000 cars on an annual basis in the country and did not say how much it would make an investment in building up its dealer network there, is far behind European and US rivals in high-growth Asian markets, with limited attendance in China, the globe's largest market.

Fiat, which will establish a novel company to market its models and develop the network of Fiat-Tata franchises, has a fair amount of brand credit - its 1100 sedan was sold under licence in India from the mid-1950s to 1997, first as the Fiat 1100 Delight and then as the Padmini.

It presently sells the Linea, Palio and Punto models in the Indian market, and eyes to launch extra brands from a portfolio that consists of Alfa Romeo, Chrysler, Dodge and Jeep.

In a statement, the companies stated, "Development of the new Fiat dealer network for India will start progressively and the 178 existing Fiat-franchised Tata dealers in 129 cities will be encouraged to form the foundation of the future network."

An affiliation producing Fiat and Tata cars and also engines and powertrains at a facility in Ranjangaon, remains in place, the two companies said.

In its five years of operation, the JV has fabricated 190,000 cars and 337,000 power trains.

Both partners have suggested that alterations were in the works.