Fiat to join the small car race; to unveil its own version in 2012

Fiat to join the small car race; to unveil its own version in 2012
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First Published: Thu, Jan 07 2010. 01 02 AM IST

Concept play: Rajeev Kapoor, president and CEO of Fiat India, with the limited edition Fiat 500 at the 10th Auto Expo in New Delhi. Pankaj Nangia / Bloomberg
Concept play: Rajeev Kapoor, president and CEO of Fiat India, with the limited edition Fiat 500 at the 10th Auto Expo in New Delhi. Pankaj Nangia / Bloomberg
Updated: Thu, Jan 07 2010. 01 02 AM IST
New Delhi: In a case of yet another global auto maker joining the small car bandwagon, Fiat Automobiles India Pvt. Ltd said it will unveil its own version in 2012.
The car, being designed specifically for the Indian market, is being developed at Fiat SpA’s headquarters in Turin, Italy, said Rajeev Kapoor, president and chief executive of Fiat India.
Concept play: Rajeev Kapoor, president and CEO of Fiat India, with the limited edition Fiat 500 at the 10th Auto Expo in New Delhi. Pankaj Nangia / Bloomberg
To tap the small car segment in India, which accounts for two of every three cars sold in the country, Toyota Motor Corp., Volkswagen AG, General Motors Co. and Honda Motor Co. this week unveiled their new small car offerings at the Delhi Auto Expo, held every two years.
The car makers are seeking to challenge the dominance of Maruti Suzuki India Ltd and Hyundai Motor India Ltd in the small car segment.
“We should be able to unveil the concept at the next auto expo,” Kapoor said. The car, which is being jointly developed by Fiat India and Fiat SpA, will be positioned below its compact car offerings Grande Punto and Palio, he said. Fiat launched the Punto in July.
Click here to see the slideshow of most expensive cars and bikes at the Auto Expo
The small car segment presents an opportunity to any auto maker that can produce one, said Pankaj Chadha, partner at Ernst and Young India Pvt. Ltd. “For the next five years, every car maker will be monitoring this segment very closely,” he said.
Fiat India, with less than a 3% market share in India, lags behind rivals and its entry into the small car segment may help it reduce the gap in the price-sensitive market. “We will continue to have a clearly differentiated product strategy,” Kapoor said, brushing aside concerns that the small car may cut into the market of its partner Tata Motors Ltd.
Fiat, which now sells the Linea sedan in India besides the Palio and Punto, expects to double its sales in the country in 2010.
In the year ending December, the company sold 23,000 units.
The car maker plans to launch three variants of its existing models this year and a car that can use multiple fuels, Kapoor said. Fiat has a 50:50 joint venture with Tata Motors to produce cars at Ranjangaon near Pune. The company also retails and services its cars through the dealership network of Tata Motors.
The facility has the capacity to produce 160,000 units per year, only a fraction of which is being utilized because it is still in the process of ramping up sales.
Sales volumes for the company will be led by the Punto. Fiat expects capacity utilization to reach 80% by 2012.
The Indian unit expects exports to countries such as South Africa, Sri Lanka, Nepal and Bhutan to account for 10% of its total sales in 2010.
shally.s@livemint.com
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First Published: Thu, Jan 07 2010. 01 02 AM IST