Fiat starts work on small car, launches Linea 2012

Italian car maker Fiat has started work on its small car for India. The car, which would be placed below the hatchback Punto, would be designed on the company's existing platform.

"The car will be a model from the global portfolio, but with modifications to suit the the Indian consumers. Launching a globally successful car in the market does not work," said Rajeev Kapoor, president and chief executive officer, Fiat India.

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According to him, Indian consumers look for more space, better ground clearance and powerful air conditioner. He, however, did not give a time frame for the launch.

The Italian car major on Tuesday launched the 2012 editions of the Fiat Linea and Punto with improved accessories even in the base model, and ground clearance.

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Sales of Fiat are under pressure as the company managed to sell only 501 cars in December.

The company has been battling weak sales numbers for some time. In India it sold 21,112 units last financial year, a drop of 15 per cent over the previous year.

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The decline was registered at a time when the Indian passenger vehicle industry grew 29 per cent to sell 2.52 million units in 2010-11.

A reason for the drop in sales is poor dealer and service network. The company, which had entered into a joint-venture with Tata Motors in 2007, sells products through Tata Motors' sales outlets.

Currently, Fiat shares around 167 dealership points with Tata.

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Kapoor also said the company was working towards creating separate space for its cars in the Tata Motors dealerships at 22 sales points.

"We have asked existing Tata dealers to have separate space for Fiat cars in the showrooms. Besides, we would also open Fiat Cafes in Delhi and Pune this year," he said.