"The 178 range, a family of five vehicles, will be manufactured in India before long," Simoncelli said.

The Palio family consists of a hatchback, the siena saloon and the weekend station wagon, Simoncelli said. A pick-up version and a van were being developed, he added.

Palio will have a higher indigenisation level from the first vehicle itself and the company hopes to attain 70 per cent level much ahead of the stipulated five years, he said.

As part of its globalisation plans, Fiat will bring its 30 to 40 component manufacturers to India to source ancilliary products for the car project.

Fiat is also considering manufacturing the engines and transmission system locally, Simoncelli said after signing a memorandum of understanding (MoU) with the IndianInstitute of Technology, Delhi, for technical and scientific cooperation.

Fiat is in the process of signing an MoU with the government and the modalities in this regard were being worked out, the Fiat official said.

The Fiat senior vice-president said his company will invest $1 billion in the country over the next five years as it viewed India as the "most important market outside Europe."

The investment will be spread in different areas of Fiat's operations in the country, including its financial services, Simoncelli said. The company has invested around $200 million so far, he added.

Fiat's financing arm, Fidis is scouting for a partner to set up a joint venture for automobile financing, he said. The company will consider entering the insurance sector after the government specifies its policy, he added.

On Fiat's plans to enter the chemical and food sector, Simoncelli said the company had dropped the idea as the market situation was not very conducive.

Fiat, which is operating in the countrythrough a number of joint ventures including the one with the Doshis of Premier Automobiles, last year set up its fully-owned subsidiary, Fiat India Automobile Ltd (FIAL).

The company has 51 per cent stake in Ind Auto, its joint venture with the Doshis, who hold the rest.

The company, which make the `Uno' cars, is "doing very well now thanks to the growing sales of the Uno diesel," Simoncelli said.

A new factory is being built on a greenfield site at Ranjangaon in Maharashtra with an output capacity of about one lakh units, he added.

Simoncelli said Fiat had introduced two of its ancilliary units - Magneti Marelli and Comau - in the country and both were located in Pune.

While Magneti Marelli will manufacture car components, Comau India specialises in the creation of very high-tech manufacturing systems.

The company is ready to offer its know-how to other domestic motor manufacturers, he said.

Regarding Fiat's tie-up with Ashok Leyland, he said the company had so far invested $300 million in thejoint venture that make the `Iveco' trucks and will invest another Rs 9 crore this year.

On auto companies resorting to price slashing, Simoncelli said reducing of prices was a global trend as competition had become intense.