The Hindu Business Line : Fiat keen on sourcing components from India

Plans ahead
Initially, Fiat will source components for the Grande Punto as well as Linea.
Rs 4,000 crore will be invested over the next five years to expand Ranjangaon factory.
Dealership network with Tatas leads to improvement in sales.

Mr. De Filippis Giovanni

K Giriprakash

Bangalore, June 28 A resurgent Fiat now wants to source auto components from India for most of its global models.

Fiat India’s Managing Director, Mr De Fillippis Giovanni, told Business Line that its Ranjangaon factory, set to open in November, could see the company increase efficiency by 10 per cent.

“The cost of labour as well octroi when we used to operate our plant from Mumbai was eating into our income. With the new factory, we expect better efficiencies as well savings on operational costs,” Mr Giovanni said.

He said currently Fiat exports about 3 million euros worth of components for its Palio model. Now the Italian car maker wants to source more parts from Indian auto component manufacturers for most of its models and even those which it will not manufacture in India. Initially, it will source components for the Grande Punto as well as Linea. “We are already scouting for manufacturers who could supply us parts for our models,” Mr Giovanni said.

As per the phased expansion of the factory at Ranjangaon, about Rs 4,000 crore will be invested over the next five years. The current capacity of the plant is 1 lakh passenger cars and 2 lakh units of engine and gearbox. The current capacity is expected to be fully utilised by 2010. “We could go for second or even third shift to increase the number of passenger car units and other parts as well,” he said.

Tata jt venture

As per the joint venture agreement between Fiat and the Tatas, a Tata car will also be produced from the same factory and is expected to roll out by 2008. “The engine and the model will remain the properties of Fiat but they will be licensed to the joint venture,” Mr Giovanni said.

While the Linea as well as Punto will also be launched by 2008, Fiat is considering other models as well and none of them will be below 1.4 lts. “We want to be strong in the B plus as well as C plus segments,” he said. “India is a very demanding market. Hence we have to be very cautious of pricing,” he said.

Mr Giovanni said the common dealership network between Fiat and the Tatas has led to improvement in sales of the Italian car maker in India. Currently there are 28 such common dealerships which will be increased to 100 by next year.

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