By Santanu Choudhury, Bloomberg
New Delhi: Fiat SpA, Italy’s biggest carmaker, said it plans to export the Grande Punto and other models from India, seeking to use the nation where it has a 0.2% share as a production base for overseas markets.
Production details have yet to be worked out, Stefan Ketter, senior vice president in charge of manufacturing at Fiat, told reporters today in Pune, reiterating the company’s plan to invest Rs 3,795 crore ($881 million) with its local partner Tata Motors Ltd. in India.
Nissan Motor Co., Suzuki Motor Corp. and other automakers are preparing to use India as an export hub because it’s cheaper to produce cars in the country. Fiat, which today opened a factory in western India jointly with Tata Motors, is also investing to tap local demand as sales of cars in India are set to triple to 3 million units by 2015.
“The country is on the verge of becoming the growth engine of the global automobile industry,” Ketter said.
Fiat will make 100,000 cars such as the Palio, Grande Punto and the Linea and 200,000 engines at Ranjangaon, in western Maharashtra state, he said. Tata Motors will use the factory to make a new model starting 2008, said Rajiv Dube, Tata Motors president in charge of the automotive unit.
Fiat is looking at exporting the Grande Punto and the Linea from India to Asian markets, including possibly Japan and China, said Giovanni de Filippis, managing director of Fiat’s India unit. Fiat makes the Grande Punto in Italy and Brazil, he said.
The cost of producing cars in India is at least 15% less than in Brazil and substantially less than in Italy, Filippis said. The Grande Punto will go on sale in India in the middle of next year with 90% of components procured locally, he said.