Sales of the Palio, a compact car from Italian car maker Fiat Auto, have suffered as production has been halved at the company’s sole manufacturing facility in Ranjangaon, Maharashtra, reports Business Standard today.

Fiat India Automobiles (FIAPL), a 50:50 industrial joint venture between Fiat Group Automobiles and Tata Motors, makes the Palio Stile, Fiat’s oldest hatchback in the country, priced at Rs 3.45 lakh (ex-showroom, Mumbai).

Data available with the Society of Indian Automobile Manufacturers (Siam), the apex automobile body in the country, shows production of the Palio was 667 units during January-April, compared with 1,452 units in the corresponding period last year. Sales nosedived to just 388 units in the period, compared with 1,404 units last year, a dip of 72 per cent.

“Production was hurt because of the paint shop. We now have our own paint shop and hopefully the production will be restored to its original level,” said Ravi Bhatia, vice-president, (commercial), FIAPL. The Palio, being the lowest-priced car in the Fiat stable, remains the largest selling one, more than 43 per cent of total sales in the last financial year. The Italian car company sold 8,087 units in the domestic market last year.

Despite the car having a petrol and diesel engine option, the Palio has failed to create much impact in the compact car segment, even though the company gave it a face-lift in March 2008. Experts say strong competition from other car makers in the same segment like Maruti Suzuki, General Motors, Hyundai Motors and SkodaAuto has dented the target market. Around 3,500 Palios were sold last year. That many units of Maruti’s Wagon R and Hyundai’s Santro are sold in a month.

Report courtesy of Business Standard