Fiat India, GMI To Explore Synergies

Mumbai, May 29: | Updated: May 30 2002, 05:30am hrs
Fiat India and General Motors India (GMI) are currently evaluating the possibility of synergising their operations in certain areas such as common dealer workshops, logistics and sourcing from common vendors. This is in line with the international understanding between the two auto giants whereby the companies have decided to work closely at various levels.

The idea is to have cost savings on both sides. However, higher levels of synergy such as developing a common powertrain is not in the offing as that would require large volumes, said Fiat India chairman and managing-director MP Bianchi.

He added that Fiat and GMI have only around 2-3 common dealerships. Fiat has 67 dealerships, while GMI has around 36 dealers.

Fiat Spa had sold 20 per cent of its auto unit to General Motors in 1999. The Italian company is undergoing a sweeping restructuring whereby the banks have agreed to a reorganisation of its Euro six billion in debt. It has also been reported in the international media that GM is considering taking over Fiats car unit sooner than expected.

However, Mr Bianchi said the international developments would have no bearing on the Indian operations and that Fiat India had the full support of its parent for its future product plans.

Company officials added that Fiat India may now look at bringing in some of their international models like the Alfa Romeo as completely built units.

Fiat has also launched the Palio Adventure and the Palio Weekend. The Adventure is a cross between a sport-utility vehicle and a multi-utility vehicle and is expected to create a new segment. While the Adventure is priced at Rs 6.95 lakh, the Weekend is priced at Rs 6.70 lakh (both prices ex-showroom New Delhi).

Mr Bianchi said the Kurla facility had an annual production capacity of 60,000 units. The company has another facility at Ranjangaon which can manufacture one lakh vehicles annually. We can start production at the Ranjangaon facility within 5-6 months of deciding to do so. However, in view of the current economic situation and demand conditions we have not decided on using the facility, said Mr Bianchi.

Fiat will introduce the 1,900 cc diesel versions of Palio and Siena ranges by the beginning of next year and this would complete the product range for the 178 platform of passenger cars in India.