"We have been sourcing components from India for some time now and expect this to be over ten million dollars in 2006," newly-appointed Managing Director of Fiat's India subsidiary De Filippis Giovanni said here. The components are being sourced for the company's 'Palio' model in South Africa, he said. "India is a very competitive market for components and we hope to increase the level of sourcing over the coming years," Giovanni said on the margins of the 'Tenth Asia-Pacific Automotive Industry Roundtable'.

Despite the boom in the Indian car market, Fiat has been facing tough times in the country with sales dropping to low double-digit numbers. The company had to shut down production at its plant at Kurla in Mumbai after severe rains in Maharashtra disrupted operations at the facility. Fiat also has a plant at Ranjangaon, near Pune, though here the capacity is lying idle due to lack of demand. The company has said it will resume production of the Palio, Petra and the Palio Adventure at Kurla from January 2006. "Fiat has plans to introduce new models in India in the coming time, as the company works on a revival strategy in the market," de Filippis said, adding that it will make investments for this. "Our parent company will be funding big investments in India towards this end," he concluded, though refusing to specify numbers.

Fiat recently announced a Memorandum of Understanding with Indian auto giant Tata Motors to analyse the feasibility of cooperation, across markets, in the area of passenger cars that would encompass development, manufacturing, sourcing and distribution of products, aggregates and components.

A joint team would be set up by the two companies to determine the feasibility and specificity of the nature of cooperation, both in the short and long term. Asked whether the company was looking at using Tata's vast network across India for servicing its customers, apart from other arrangements, Giovanni said it was "too early" to comment. "You have to wait for some more time as we are working on the matter," he said.

This news feature appears in The Hindu