Fiat and Tata are restructuring their joint venture in India to give control of vehicle sales to the Italian auto maker.

Under the new agreement, Fiat will set up a wholly owned company to oversee distribution activities and begin setting up a new dealer network in the country. Until now, Tata has controlled distribution under the JV.

The auto makers say the 178 existing Fiat-franchised Tata dealers located in 129 cities “will be encouraged to form the foundation of the future network,” an indication they will have to earn their way back into the Fiat fold.

Fiat car sales in India totaled only 5,221 units in the first quarter, down 11.2% from like-2011, according to WardsAuto data. Last year, Fiat car sales reached only 16,733 units, giving the brand control of less than 1% of the market.

The Fiat-Tata JV will continue to exist as a manufacturing cooperative, which covers production of Fiat and Tata cars, engines and transmissions at a plant in Ranjangaon, India. During the JV’s five years of operation, 190,000 vehicles and 337,000 powertrains have been produced for both the local and export market, Fiat says.