India is set to play an important role in Fiat's plans to launch an all-new global low-cost car brand by 2010, reports Times of India. While the Italian auto major is looking at possibly marking India as one of the key hubs for supply of components for this brand, the company may also tap into the experience of its Indian partner Tata Motors, that already holds the distinction of rolling out the world's cheapest car, Nano.

Silverio Bonfiglioli, chief operating officer of Fiat Group Automobiles International, told TOI that the company sees India as an important participant in the ambitious low-cost brand project, though clarifying that their plan is not aimed at developing a Nano-type ultra cheap car. "The Nano is positioned in the bottom end of the A segment. We have experience in developing vehicles in the top-end of the A segment or the bottom end of the B segment. It's that area where we probably want to develop a low-cost car," Bonfiglioli said.

Indian component suppliers would be tapped for this project. "Local Indian suppliers are cheaper than the suppliers in other countries. And their quality is good too. So we can use India as a base for supply of certain components," he said.

Fiat already has a purchasing office at New Delhi for components and expects to export parts worth 250 million euros by next year. On help from Tata Motors for the low-cost brand, he said Fiat would rely mainly on its own experience of producing low-price cars, especially in South America. "And if necessary, we will use the Tata experience," Bonfiglioli said.

To revive its operations in India, the company has lined up aggressive model launch plans. It made a strong entry into the mid-size car segment with the Linea sedan that would compete with the likes of Suzuki Dzire and Honda City. The petrol Linea costs between Rs 6.17-7.2 lakh while the diesel version costs between Rs 7.1-8.3 lakh (ex-showroom Mumbai). The next new launch from the company is that of Grande Punto hatchback. "We are hopeful that these two models will help us increase annual sales to 70000 cars by 2010," Bonfiglioli said.

Fiat has revamped its production strategy in India and now has a JV with Tata Motors for manufacturing cars and engines at Ranjangaon in Maharashtra. The company had a poor 0.2% share of the domestic car market in 2007-08, which it hopes will see a healthy turnaround on the back of the new launches. Also, it hopes to benefit from the sales and service tie-up that it has with Tata Motors as part of which its cars are sold through select Tata dealerships across the country. Bonfiglioli said the current slowdown in the market will not see the company scale down its investment plans for India. "The investments would continue as we have to plans for the future," he said.

Report courtesy of Times of India