Top company officials say that they have taken a decision to introduce all its future models from its Kurla plant instead of setting up a brand new plant in Ranjangaon near Pune. Fiat has a 51 per cent stake in Ind Auto Ltd which owns the Kurla plant while Premier Automobiles (PAL) owns the rest of the equity. The plant was earlier owned by PAL.

``There is no need to set up a new plant as the current plant with a capacity of 60,000 cars per annum can meet all the future demand. As and when the need arises we will look at the option of setting up another plant,'' officials said. The company had acquired land from the Maharashtra government at a concessional rate and done some ground work at the site. But as the automobilemarket shrinks due to entry of many players, company officials say that a greenfield auto plant will not make any economic sense.

This decision will hit the Maharashtra government, which was making announcements in every forum that it had bagged a world-class auto project beating stiff competition from the neighbouring states. With this, the government will have yet another industrial project slipping out of its hands. Fiat had decided to select Maharashtra when other big car makers like Ford and Hyundai had set up plants in Tamil Nadu while Toyota selected Karnataka because of intensive sops granted by the present government.

With this development, Fiat's Sienna and Palio model would be introduced by Ind Auto Ltd's Kurla plant instead of Fiat Auto India Ltd (FIAL) which is a 100 per cent subsidiary of the Italian automaker headquartered in New Delhi. The Sienna was initially to be part of the new Ranjangaon facility.

Similarly, Fiat's world car Palio would be introduced by Ind Auto by the end of 1999.The Palio is scheduled for a simultaneous world-wide launch next year. Fiat took over the Uno operations of the Kurla plant early this year and decided to increase output of the car to about 50 units daily. The company had stopped production of outdated petrol version of Premier Padmini at the same time to accommodate forthcoming models.

Ind Auto also introduced the 1700 cc diesel version of the Uno in the middle of this year and the demand for the car is believed to be slowing down. The entry of small cars like Daewoo's Matiz, Hyundai's Santro and Telco's Indica is being cited as the reason for slowdown in Uno sales.

The Kurla plant, with a capacity of 60,000 vehicles, was intended only for manufacturing the `Uno' model. The new facility at Ranjangaon, with a capacity of 1,00,000 units was to be commissioned towards the end of 1999.