Fiat already has around 50 dealers in the country and is planning to strengthen its network, a strategy which company sources say should help almost double its market share to 6 per cent in the passenger car market by next year.

The European car maker, which has received the FIPB approval for hiking the share capital of its wholly-owned subsidiary, Fiat India Automobiles (FIAL), has decided to bring in the funds in phases to finance its ambitious expansion plans in the country. FIAL currently holds a 76 per cent stake in Fiat IndAuto which produces the Uno and Siena models in India.

"There is no need to bring in thefunds at this juncture. However, we will call the investments as and when we need them," FIAL managing director Giovanni Battista Ravina told The Financial Express.

After the welding shop at Kurla is ready by next year, Fiat will launch the much-awaited world car--Palio and the Station Wagon. "The 1.2 litre luxury two-box car Palio is in a league of its own and does not compare with the cars available in the Indian market today. Especially, since the car does not address any one of the current market segments. In fact the Palio, will address an all together different segment, and we have reasons to be confident about its success," Ravina said adding that the car will be tailored for local conditions.

Once the Ranjangaon plant is ready, possibly by next year, the production of the Siena will shift to the new facility, which will also roll out the Palio and the Station Wagon. Given that the Ranjangaon facility would have an operational capacity of 85,000 vehicles, the manufacture of the Siena and thePalio should then be easily accommodated. On the other hand, the Kurla plant, which has a capacity of 60,000 units, will then concentrate on the production of its small car Uno. "Due to our production constraints, we are now finding it difficult to meet the demand of the Uno. In some markets, there is a 6-8 month backlog for supplying the Uno," Ravina said.

The company is currently rolling out around 1,500 units of the Uno at Kurla, which will increase sharply once the production of the Siena shifts to Ranjangaon. Last month, Fiat Ind Auto sold 720 Sienas while sales of its popular Uno stood at around 1,400 units. The Siena, which was launched earlier this year, has received a positive response and the company has set a not-too-ambitious target of selling around 12,000 vehicles by next year.

According to Ravina, Fiat is not looking at CBU imports into the country for its top-of-the-line models as the current customs duty structure does not justify it. "If the duty rates are brought down, we will be onlytoo happy to hawk our premium range," Ravina said.