The venture will be dedicated to financing only Fiat cars in India. This includes Fiat Uno, which is already out in the market and the new range of world-car models, `Siena' and `Palio'. Fiat's sedan version Siena is set to be launched in the country towards end-January, while its small car version Palio will follow afterwards.

The equity structure of the new venture is currently being put in place. "We are envisaging an equity size of around Rs 100 crore after two years of operations," Sundaram Finance managing director GK Raman said. The formalities towards setting up the company are getting completed and after obtaining necessary approvals from the government, including the FIPB and RBI clearances, thecompany is expected to start operations in April, 1999, the chief executive of the new venture Oscar Madeddu said.

Sundaram Finance will continue to finance all vehicles other than Fiat's. Fiat cars will be financed exclusively by the new joint venture. Sundaram Finance is the largest vehicle finance company in India.

FISAF will be doing `end-to-end' financing for Fiat's operations in India. This includes financing suppliers, dealers and customers of Fiat. The new company will offer consumer finance through the Fiat Auto dealer network and Sundaram Finance's branches. Fiat plans to have 45 dealers to begin with which will be increased to around 100 dealers in three years. It will also have 300 service points across the country.

Sundaram Finance's contribution to the joint venture will be in the form of credit appraisal, maintenance of systems support and its huge network. Sundaram Finance has strong presence in all regions except east, where it has only a branch in Calcutta.

"The joint venture will bean important vehicle for promoting Fiat sales in the country. It will benefit from the synergies accruing from Sundaram Finance's extensive branch network, credit appraisal skills and established processing support on one hand and Fidis' expertise indeveloping state-of-the-art financial products and risk management tools on the other," said Madeddu.

Fidis' primary role has been to promote Fiat sales worldwide by offering options to the customers, dealers and suppliers.