Fiat to take up export obligation issue with centre
Rupali Mukherjee
Fiat Auto of Italy has joined the list of auto companies that plan to take up some loopholes in the new automobile policy with the government. The others include Volkswagen and Mercedes Benz India.In the case of the upper end of the luxury segment, the stumbling block is the localisation schedule of 70 per cent in five years, which, sources say, is impossible to achieve. In the case of Fiat Auto, the export obligation clause in the new auto policy is "difficult" to achieve even though it stipulates that both cars and components can be included in it. This is because Fiat Auto which manufactures the 999 cc petrol-driven Uno would not have a market overseas as this car is being produced in Europe also. It is not feasible to export fully built Unos from here to Europe as there would be no cost benefits accruing to Fiat. The company, in any case, has sewn up its marketing in Europe from its plant in Italy, sources said. Fiat Auto, however, does not envisage any problems with the Palio world car which is
scheduled to be commissioned at the Ranjangaon facility near Pune in 1999. The car will start off with a high local content of 70 per cent and it is a model that is contemporary to two other countries. The indigenisation process is also expected to be on track for the Palio as Fiat's subsidiary Magneti Marelli is also setting up a unit near Pune in partnership with the Doshi family. Another subsidiary that manufactures castings, Teksid, has tied up with the Kalyani group for a greenfield facility in Baramati. Apart from these two names, a host of suppliers to Fiat worldwide have already entered into tie-ups with their Indian counterparts for manufacturing components here. This has, in fact, led to the local content of the Uno reaching nearly 40 per cent. Fiat Auto intends producing 25,000 Unos during calendar 1998 at the Kurla plant . The company plans to introduce the 1700 cc diesel Uno by April and sources have indicated that this car could account for a greater part of the production mix, given the
growing consumer preference for diesel. The Palio will come in three versions powered by both diesel and fuel. The car will roll out from Fiat's 100 per cent subsidiary, Fial (Fiat India Automobiles Ltd). The eventual capacity planned is 100,000 cars. Interestingly, the Kurla plant is still awaiting christening and sources say the decision will be made shortly.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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