NEW DELHI, July 21: The $50-billion Fiat International has earmarked an investment of $ 1 billion in the next five years (1997-2002) for its present and future joint ventures being planned in the country.

Speaking on `Globalisation of the automotive industry', Paolo Cantarella, chief executive officer Fiat Spa said here on Monday that these investments relate to the main sectors in which the group operates.

Fiat India Auto Ltd, a joint venture company recently set up with the Doshi family will make Fiat's world car Palio in a Maharashtra plant. Construction of the plant will start before the end of this year. Commercial production will start by late 1999 and "by the year 2000 we will produce between 900,000 and 1 million cars a year," Cantarella said.

Cantarella said Fiat had just set up a new company, Fiat India Auto Ltd (FIAL), a joint venture with the Doshi family for producing 178 project models in a new factory. The work on the project will begin before the end of the year.

"If all our plans materialise we believe that by the year 2000 we will be producing between nine lakh to one million cars a year," he said. `Palio World Car' (titled the 178 project) consists of five separate models including a hatchback and booted saloon versions, a station wagon, a pick-up and a mini van. The car, which is meant for the developing markets, was launched initially in Brazil last year.

Stating that Fiat was planning to establish two manufacturing outposts in Asia, China and India, Cantarella said palio will be introduced in Turkey, South Africa and Morocco soon.

He said the company was planning substantial local content in all the joint ventures in India and each venture will be designed for the involvement of local suppliers.

The Fiat chief said Italian companies were already holding talks with Indian companies for technological deals or even full-fledged joint ventures as a back-up for Fiat's new manufacturing operations.He said India had made considerable progress in economic and social development.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.