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Fiat way to tackle market slowdown

— Photo: SHASHI ASHIWAL

BETTING ON CUSTOMERS: Linea being rolled out of the Ranjangaon facility of Fiat near Pune in Maharashtra.

MUMBAI: In a bold move amid dipping car sales and all-around production cuts in the automobile industry, Fiat India has announced that it is launching two new models in India — the Linea sedan in December and Grande Punto in February 2009.

The company on Friday rolled out the Linea from the Ranjangaon plant near Pune in Maharashtra where commercial production was announced. The Ranjangaon facility was set up as a Rs. 4,000-crore, 50:50 joint venture between Fiat and Tata Motors and has a capacity to make two lakh cars three lakh powertrains (engines) annually. Linea is positioned in the C plus segment and is to be launched in the third week of December. Linea was first launched by Fiat in Istanbul, Turkey, in May 2007. Grande Punto, a hatchback, has been a top seller in Europe, clocking annual sales of around 3.50 lakh units.

Addressing the media, Fiat India Automobiles Chief Executive Officer Deepak Kapoor said “the best way to tackle a market slowdown is to launch attractive products. Linea is probably the best car in its segment and would certainly be accepted by Indian buyers.”

Fiat plans to step up exports of Palio, which is being made at Ranjangaon. According to Mr. Kapoor, “Exports of the 1.2 Palio petrol both AC and non-AC variants have commenced. The 1.2 Palio petrol is being exported to South Africa and the company will look at prospective right hand drive markets for export of other products. The products exported from the Ranjangaon plant will include versions of Palio, Linea and Grande Punto. FIAL also supplies automobile components to other Fiat facilities.”

Fiat was rolling out the car from a brand new platform and according to Mr. Kapoor, “Fiat is launching a car from its own manufacturing facility after 2001 when Palio was rolled out from the Kurla plant. The new car will help Fiat establish our brand in a new avatar.” The Kurla plant has since been shut down and disposed of. Tata Motors’ new version of the Indigo sedan will also be made at Ranjangaon. Linea will be sold with diesel (1.3 litre) and petrol (1.4 litre) engine options and with three versions each — Active, the basic model and Dynamic and Emotion being the higher end models.

The current level of localisation of Linea was around 55 per cent but this would rise to 90 per cent by December 2009, said Mr. Kapoor.

Corrections and Clarifications

* * The Chief Executive Officer of Fiat India Automobiles is Rajeev Kapoor and not Deepak Kapoor as stated in the report, "Fiat way to tackle market slowdown" (Business, November 23, 2008).

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