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Fiat to export parts from Indian Palio car project

Italian auto giant Fiat SpA plans to export auto parts from its Indian Palio car project to South Africa, a company official said.

"We have a plant in South Africa and we would be exporting components from India," Gualberto Ranieri, Fiat's vice-president for corporate communications, told reporters.

Fiat will launch the Palio in India later in 2001 and plans to make 50,000 cars in the first year at its plant in Bombay. Over 70 per cent of the car's components will be made locally.

The Palio will be positioned in India's B segment which comprises cars with engine capacities ranging from 1.0 to 1.6 litres and priced at between 300,000 ($6,409) to 450,000 rupees.

It will compete there with the Zen, Alto and Wagon R from Maruti Udyog, a joint venture between Japan's Suzuki Motor and the Indian government, the Santro from Hyundai, the Matiz from Daewoo and the Indica from Indian firm Telco.

The B segment accounts for half of India's car sales.

Fiat already sells its Uno hatchback in the B segment and two versions of the Siena in India's mid-size car segment.

Ranieri said Fiat had identified India as one of the seven most promising future markets and hoped to improve its performance in the country with the Palio.

Fiat India Automobiles Ltd sold a mere 9,370 cars in India in the financial year ended in March, giving it a negligible share in the country's total car sales of 590,647 in 2000-01. It sold 20,746 cars in the previous year.

Maruti Udyog dominates India's car market with its small, reasonably priced cars and had a 58 percent share of the market last year.

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