The Fiat-Tata joint factory at Ranjangaon in Pune already assembles the Fiat Palio Stile (above); it will shortly be joined by the Grande Punto and Linea.

Fiat India Automobiles, an equal joint venture between Tata Motors and Fiat Group, on Monday announced that it would invest Rs 2,341 crore to expand its facility in Ranjangaon plant in Pune.

Fiat plans to ramp up its operations to produce up to two lakh cars, three lakh engines and three lakh automotive parts and accessories. The plant would provide additional direct employment to 1,000 persons at full capacity.

Fiat has invested Rs 1,679 crore, taking the overall investment to Rs 4,020 crore. At present, the Ranjangaon plant can manufacture one lakh cars and two lakh engines. Fiat on Monday signed a Memorandum of Understanding (MoU) with the Maharashtra government in this regard.

The state government release said that the MoU would be a huge boost to the company as it plans to launch two cars- Linea and Grande Punto later this year, which will be manufactured from this facility. The MoU would also aid in the production of the 1.3 Multijet engines that was recently launched by the company in its product offering the Palio Stile.

Rajeev Kapoor, chief executive office, Fiat India Automobiles said, “The MoU inked with the Maharashtra government is an important step in realising Fiat’s expansion plans in India. The MoU will help us meet increased customer demands and simultaneously facilitate backward integration.” Kapoor informed that the company would raise funds from banks.

The Maharashtra chief minister Vilasrao Deshmukh said, “The joint venture between Fiat Group and Tata Motors has contributed immensely to the development of the region in and around Pune by setting up the plant at Ranjangaon. I am happy to note that FIAPL has planned to bring in fresh investment in its existing plant to increase the manufacturing capacity.”

State industries minister Ashok Chavan said, “Fiat was one of the first auto companies to enter India and has been close to the state ever since. Now, with major restructuring and expansion plans, Fiat has again chosen the state as the investment destination.”

Report courtesy of The Financial Express