Fiat are preparing to resume assembly operations in Venezuela after a five year break, with the first models schedule to roll out of a new plant in January.

Today they signed an agreement with Venezuelan company Comercializadora Todeschini to begin assembly of the Novo Mille, while at the same time announcing a raft of new model imports.

The Italian carmaker, who previously assembled the Uno and Palio in this South American country, terminated production five years ago when a spiraling oil and political crisis rendered the activity no longer feasible.

However Fiat now see the time as ideal to return. "The market has begun to recover and the government has created fiscal stimuli and incentives to increase production," commented a Fiat spokesman today.

From January they will start local assembly of the Brazilian-built 'Novo Mille', a facelifted version of the long running Uno model, which was recently restyled by Fiat Cento Style.

Fitted with a 1.3-litre petrol engine, the Venezuelan assembled model will slot neatly into the 'family car' category that is currently eligible for government incentives. Major components will be shipped up from Brazil, while around 30% of the total will be sourced locally.

Fiat will not carry out the assembly themselves, rather they will license the operation to the local concessionaire, Comercializadora Todeschini.

"Fiat produces cars by means of this type of licensing agreement in other countries, such as Morocco and Egypt", explained a Fiat spokesmen.

Around 10,000 Novo Mille models are expected to be built next year under the new arrangement, while on top of this figure, another 5,000 models will be imported.

"During the first quarter of 2005, we will have the ability to build the Fiat Mille with the same quality as the ones that are produced in Brazil", company Dircetor Luca Todeschini, assured the national press.

As Fiat seek to regain their leadership of this market, the new Palio, Palio Weekend, Siena and Marea will be relaunched after a rigorous two month US$800,000 advertising campaign. Next year these models will be joined by the Stilo, Strada an Ducato.

At present Fiat imports just 4,000 cars a year to Venezuela, so next year's ambitious plans will see volume more than triple.

The internal crisis in the South American oil producing nation at the beginning of this decade resulted a rapid downturn in new car registrations.

From a peak of 260,000 new cars sold in 2001, it fell sharply to just 63,000 last year, although this year, sales are expected to rise by 50%, with 87,000 cars having already been registered by the end of September. During the 2001-03 period Fiat's market share has slipped from a commanding 22%, to just 10%.

Fiat are optimistic for the future of this market. "We are sure that we will become once more competitive and we will fortify our presence in the Venezuelan market", commented Cledorvino Belini, director of Fiat Cars for Latin America.

Eventually it is expected that Venezuela will become a hub for production of the Novo Mille, with a 1.0-litre FIRE engined model pencilled in to join the 1.3-litre. If these venture proves successful, further assembly operations will be considered.

by Edd Ellison