Fiat Auto South Africa and Nissan South Africa jointly announced on Thursday their decision to terminate the assembly and parts distribution agreements on 31 August 2007, just under one year earlier than the scheduled termination date of 15 July 2008.
Giorgio Gorelli, MD of Fiat SA (FASA), says that: "FASA sees the early termination of the agreement as an opportunity to consolidate the delivery time of products to the market and the capacity to deliver the product requested by the customer."
Gorelli stated further that: "The level of service in terms of parts and vehicles, will be ensured thanks to the recent merger of Fiat Auto South Africa with Fiat Auto's Brazilian operations.
"Fiat Auto's operations in Brazil has proved its capacity to compete and deliver at the highest possible level in the Brazilian Market where it has retained the clear leadership of the market, in terms of market share, quality and customer satisfaction, with the Palio and Strada models."
Future possible local industrial programs are currently under evaluation at FASA.
Commenting on the issue Julio Panama, Managing Director of Nissan stated that "The joint decision to terminate the agreements was taken in the context of the increasing competitive nature of the domestic market and in view of our long term strategic business objectives.
"It also provides us with the opportunity to reduce complexity and improve productivity and efficiencies in our manufacturing environment."
Nissan started production and distribution of Fiat products in 1990 with the production of the Fiat Uno.
In 1998, Nissan and FASA entered into an agreement for the production of the Fiat Uno, Fiat Palio and ultimately the Fiat Strada and also to run the logistics of warehousing and distributing Fiat parts and accessories in South Africa.
In 2002, the two companies initiated a strategy aimed at enhancing the respective Nissan and Fiat brands and separating the shared dealer operations and showrooms, which had been shared since the introduction of the Fiat Uno.
Both FASA and Nissan are committed to working together to ensure that the remaining periods of the agreements are mutually beneficial to both parties.