Fiat SpA and Tata Motors announced Tuesday that they will enter into a joint production agreement, considerably expanding the scope of the alliance between the two companies announced in January.

Under the new deal, a joint venture will be set up in India to manufacture cars, engines and transmissions for the Indian market and overseas, with Latin America a likely early target. The latter effort would likely take advantage of Fiat's existing production facilities in Argentina, giving the Tata brand an entry into Latin America for its utility vehicles and light trucks.

In India, Fiat will introduce new models, including the popular new Grande Punto and an unnamed sedan, to add to its Palio hatchback and Petra sedan currently sold there. Fiat will also introduce a small diesel engine to the Indian market, for an as yet undisclosed application.

[Source: DNA Money]

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