Mumbai, Dec 20: Fiat Auto's president and chief executive officer Roberto Testore reiterated here on Saturday that his company would not pick up a stake in PAL-Peugeot to revive the ailing project. He said that Fiat Auto's 100 per cent subsidiary, Fiat India Auto Ltd (Fial), was going ahead with its plans to set up a greenfield facility in Ranjangaon near Pune. PAL-Peugeot, the estranged joint venture between Automobile Peugeot and PAL, is currently looking for a partner to pick up the former's 32 per cent stake in the venture. Fiat was being perceived as one of these.

Testore was also emphatic that as of now, there was absolutely no question of the Doshis entering into an equity participation with Fiat for the Palio project at Ranjangaon. When the plans were first announced early this year, the venture was a 76:24 partnership between the Italian automaker and the Doshis. This was subsequently revised to a 100 per cent subsidiary with the option of the Indian partner picking up a stake.

However, the Doshis will now not be a part of the Palio project, which will be an exclusive Fiat venture. The cost of the project has been estimated at $500 million with the first phase involving an investment of $370 million.

The funding requirements would be met by Fiat through internal resources with no recourse to any external funds, equity or debt. Testore said the car would roll out of the plant towards the end of 1999.

The plant, situated on a 200-acre site, will have a capacity of 85,000 cars going up to 1 lakh vehicles. The models to be manufactured are the hatchback, booted sedan and station wagon versions of the "178 family project". These are expected to be followed by the pick-up and van.

As for the newly formed entity, PAL Auto, Testore said that Fiat would give top priority to increasing the Uno output. The company plans to manufacture 25,000 to 30,000 cars in calendar 1998, going up to 40,000 in 1999. This will include the 1,700 cc diesel Uno which will be on display at the Delhi Auto Expo.

Fiat will hold 51 per cent in the company with Premier Automobiles holding the balance. The finishing touches are being given to formal incorporation of the new entity following which Fiat has earmarked an investment of $70-$80 million in the Kurla plant which will cater to some infrastructure facilities. Fiat hopes to have everything ready for the launch of the company by mid-January 1998.

Testore maintained that India represented an integral part of the globalisation strategy of Fiat Auto. "Globalisation to us means a growth strategy and a long-term commitment. We are not simply looking for temporary business opportunities," he added.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.