Mumbai: Fiat Group Automobiles and Tata Motors have entered into a definitive agreement for building up engines, passenger cars and transmission with a total investment of E650 million for the Indian as well as overseas markets.

The company functionaries said that around 20-25% has been brought in out the total investment that will contain an equal ratio of debt and equity, and the remaining sum will be invested in a phased manner. The JV name is likely to be declared by October end.

The board of directors from the two JV partners will regulate the new venture. Alfredo Altavilla will be the Vice-Chairman, the CEO of Fiat Powertrain Technologies and Senior Vice-President (Business Development) of Fiat Group Automobiles, whereas Tata Motors MD Ravi Kant will be appointed as chairman of the JV.

Rajeev Kapoor, brought in from Hero Honda, has been nominated as the president and CEO of the JV. He will look after the processes of the new unit, and responsible to the JV directors.

The JV will make Fiat’s B&C section cars, Grande Punto and Linea, its 1.3 litre Multijet diesel engine, 1.2 and 1.4 litre fire gasoline engine and transmissions and one of Tata’s next generation vehicles. The Ranjangaon plants are expected to surpass an overall yield of 100,000 cars and 200,000 engines and transmission sets.

Mr. Alfredo Altavilla, CEO, Fiat Powertrain Technologies and Senior Vice-President Business Development of Fiat Group Automobiles, said, “Out of the total capacity of engines only 80% will be used for captive consumption. We are talking to a number of manufacturers for our engines and transmissions, and will make the announcement in a few months.”