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Fiat to invest $250 million for Palio facility

Corporate Bureau

Fiat India, the local arm of Fiat, Italy, would invest $250 million to manufacture Palio, which would be positioned in the upper end of the B-segment, which comprises the Santro and Zen. The company plans to sell around 50,000 units of Palio in the calendar year 2002.

Fiat India plans to launch Palio between August and December 2001, managing director Maurizio Paolo Bianchi said. He said the investment would supplement the $650 million it had put in its car operations till date.

"The money will go towards research and design and tooling at the Kurla plant in Bombay," Bianchi said.

For the calendar year 2002, the company has targeted a sale of 60,000 cars (50,000 Palios and 10,000 Sienas and Unos). This way, the company plans to utilise its entire production capacity at its Kurla plant, he said.

Fiat India is in the process of dealer revamp and at the time of the launch of Palio, it hopes to have new dealerships make up for 70 per cent of its dealer network.

The company will hike the number of dealers from 56 to 70 at the time of the Palio launch. It had only 30 dealers in January, 2000. It is also working towards having 150 service points.

Fiat sold 13,000 cars in 2000, including 10,000 units of Fiat Uno and 3,000 units of its mid-size car -- Siena -- and its station wagon version -- Siena Weekend. It had sold 18,000 cars in 1999.

Palio will be offered in the 1200cc and 1600cc hatchback petrol engine versions. "Later on, we will also introduce it in a diesel version," Bianchi said. The car would be launched with a localisation content of 72-73 per cent, which would be later increased to about 85 per cent by 2002-end, he said.

No plans to import CBUs

Fiat India has no plans to import completely built units of models from its global portfolio. The company has put on hold its plans of bringing in Multipla -- a car that runs on more than one fuel.

Clinical tests on the Multipla has already been performed. Fiat had announced plans to launch the car last year. "We are not geared to service CBU imports. As of now, we just want to concentrate on the launch of the Palio," Maurizio Paolo Bianchi, managing director, Fiat India said.

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