‘Our sourcing from India may increase ten times’3 min read . Updated: 26 Jul 2007, 09:00 PM IST
‘Our sourcing from India may increase ten times’
Early in 2007, Fiat India Private Ltd announced a joint venture with Tata Motors Ltd, India’s largest automobile company, to set up a plant at Ranjangaon in Maharashtra with the capacity to make 100,000 cars and 200,000 engines and gear boxes a year at a total investment of over Rs4,000 crore. The company, whose over 50-year-old association with former partner Premier Automobiles Ltd ended last year, is in the process of reinventing itself in India.
The Tata-Fiat tie has since strengthened with the companies expanding their strategic cooperation outside India. Tata Motors will build a pick-up vehicle bearing the Fiat nameplate at Fiat Group Automobiles’ plant in Córdoba, Argentina. The pick-up will be sold in South and Central America and select European markets through Fiat Automobiles’ distribution and importer network. In india, Fiat already has a marketing tie-up with Tata Motors to sell its cars through the latter’s dealer network.
De Filipis Giovanni, 41, the Italian managing director of Fiat India, who has spent two years here, spoke to Mint about the Tata- Fiat relationship and the company’s plan to regain the market in India. Edited excerpts:
Can Tata and Fiat together bid for assets in India and abroad under the terms of current association?
The joint venture is basically meant for Indian automotive business. We are not at present looking for any thing else. I cannot comment on the future.
How has production progressed at Ranjangaon?
We started the production of Palio Stile in February this year. From early next year, the power train unit is going to be operational. We are aiming to launch the two new cars, Grande Punto and Linea Sedan in by mid-2008. For this also, the production will start at the beginning of next year.
Which of these cars will be launched first?
We will decide on the sequence of launch later. At this moment, we are focussed on expanding our dealer network. We plan to have a 100-dealer network at the time of the launch of the car from over 60s dealers now.
What are the other plans for growing the business in India?
We are looking at India also as a hub for our global export of cars and centre for sourcing. We currently source €5-6 million (Rs27.5-33 crore) worth auto components from India for manufacturing at our plants in Europe and other parts of the world.
As we start the production of new models in India, we will look for increasing the sourcing significantly. We will use the same qualified suppliers for sourcing components for our global manufacturing.
What is your target for sourcing?
We cannot fix a target for export or sourcing. But from next financial (year) when Ranjangaon plant is fully operational, may be our sourcing will become ten times of what we are doing now.
Do you plan to employ more people at the Ranjangaon plant?
We currently have 600 people employed at the Ranjangaon plant, out of which 300 are white collar. We plan to ramp it up to 4,000 people by the end of next year. We will recruit people from Fiat’s existing operation and some people will join from Tata Motors. But the majority of recruitment would be of fresh people.
Your global chairman Luca Cordero di Montezemolo had talked about launching Maseratti in India two years back. An update on that?
For Maseratti, I believe there is this kind of possibility. I assume something could be in the pipeline.
What about Ferrari?
The chairman did not speak about Ferrari directly. He was talking about other models. I believe he was talking about Alfa Romeo. But I may not comment on this.
When you launch such cars in India, would you use the Tata Motors dealer network?
A car like Ferrari does not really need a network. You need a special dedicated organization for a car like this. It is a completely different product and has completely different target audience.