The Hindu Business Line : Fiat keen to source auto components from India

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 as o ctroi when we used to operate our plant from Mumbai was eating into our income. With the new factory, we expect better efficiencies as well as savings on operational costs,” he said.

Mr Giovanni said currently Fiat exports about €3-million 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 Grande Punto and Linea models. “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 one lakh passenger cars and two 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,” Mr Giovanni said.

Tata car rollout

As per the joint venture agreement between Fiat and 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,” he said.

While Linea and Punto will also be launched by 2008, Fiat is considering other models as well and none of them will be below 1.4 lt. “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 added.

Mr Giovanni said the common dealership network between Fiat and Tatas has led to improvement in sales of the Italian car maker in India.

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