Fiat SpA, Italy’s biggest car maker, said it plans to export the Grande Punto and other models from India, seeking to use the coutnry 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 in Pune on Monday, reiterating the company’s plan to invest €660 million (Rs3,828 crore) with its local partner Tata Motors Ltd in India.
Nissan Motor Co., Suzuki Motor Corp. and other auto makers are also preparing to use India as an export hub because it’s cheaper to produce cars in the country.
Fiat, which opened a factory in Ranjangaon, Maharashtra, jointly with Tata Motors on Monday, is also investing to tap local demand as sales of cars in India are set to triple to three million units by 2015. According to a company official who wished to remain anonynous, Fiat will launch the Palio Stile, currently made at its Brazil plant, with a 1.3 litre diesel engine next year. “The country is on the verge of becoming the growth engine of the global automobile industry,” Ketter said.
Fiat will make one lakh cars such as the Palio, Grande Punto and the Linea and two lakh engines at Ranjangaon, he said. Tata Motors will use the factory to make several new models based on a new platform, said Rajiv Dube, Tata Motors president in charge of the automotive unit. These new products too will come with a 1.3 litre diesel power plant. Tata Motors will also use the new plant as well as its own facilities to produce the next generation of its existing line-up of vehicles, including the Safari, Sumo and Indica.
On its part, 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.
The cost of producing cars in India is at least 15% lower 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% local components, he said.
Fiat has pinned its hopes on the tie-up with Tata Motors to revive its fortunes in India. The partnership currently has 63 dealerships handling products from both companies. Filippis said this could go up to 100 in the medium term.
(Sudha Menon of Mint contributed to this story.)