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Fiat to resume investments in Ranjangaon unit in 2000

Fiat SPA of Italy has decided to resume investments in its Ranjangaon unit near Pune by the beginning of the year 2000.

''By the year 2001, we will be ready to shift out from Kurla (Maharashtra),'' Gianni Ravina, managing director of Fiat India Automobiles Limited, a wholly-owned subsidiary of Fiat SPA said.

Fiat had initially planned to produce its range of world cars the Siena and the Palio from the Rs 17 billion greenfield plant at Ranjangaon. But the contracted demand in the Indian market had forced it to stop work on the unit and shift to Ind Auto Limited's Kurla unit, where it manufactures Fiat Uno.

''Things have begun to look up for us now. Uno demand has picked up fast and initial response for the Siena is also good. So, we are now looking at resuming work on the Ranjangaon unit,'' Ravina said.

The company has already set up separate assembly lines for the Siena in the unit. Besides, substantial investments are being made on a continuous basis at Kurla in the form of a Rs 800-million welding shop and a Rs 700-million integrated paint shop. The Siena assembly line has cost around Rs 60 million.

The welding shop would be commissioned by October 1999, which would raise the indigenisation level of the Siena from 20 per cent at the time of launch to 60 per cent by the end of the calender year.

''This reinforces the commitment Fiat has for the Indian marketplace,'' he added.

At the Ranjangaon unit, the Italian car-maker was initially planning to invest $ 370 million in the first phase and $ 130 million in the second stage in the facility which will produce 100,000 cars per year.

The Italian auto giant has already pledged an investment of $ 1 billion into India over the next five years for varied activities, including locally manufacturing engines and transmissions under the world car project.

The entire investment would flow into the mechanical and automotive sectors and will come through Fiat SPA and its subsidiaries. Of the $ 1 billion, around $ 200 million have been invested in the country by 1998-end.

On the second model under the world car project -- the Palio -- Ravina said the two-box car will be launched by the year-end, as per schedule. Besides, the company is also working towards introducing the Palio Weekend StationWagon, which will be the third model to be produced in India under the project 178.

''We had this constraint of the welding shop. With that being commissioned in October, the car would be launched by 1999-end.''

On the roll-out schedule for the two cars, he said the vehicles would be rolled out within a gap of two to three months. ''So far, we intend to launch the Palio first, to be followed by the Palio Weekend. But depending on the market conditions and plans of competitors, we can alter the plans.''

Although the final tags for the two vehicles have not been finalised as yet, the StationWagon is likely to be priced almost Rs 100,000 costlier than the Hatchback.

As for the Siena, Ravina said, the company plans to sell 7,000 cars in 1999 and around 15,000-16,000 units in the year 2000. The petrol ELX version of the Siena carries an ex-showroom (Delhi) price tag of Rs 550,457 while the ELX-PS version has been priced at Rs 574,995.

The Siena Diesel EL-PS would sport a Rs 614,235 price tag while the ELX-PS version would be priced at Rs 668,254.

Fiat India has decided to bypass the booking route entirely and has put in place a dealer direct purchase programme driven by customer interface.

UNI

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