Fiat India is hoping to break even in the next 18 to 24 months. The company, which has created huge capacities with investments in the order of Rs 2000 crore (Rs 20 billion), will continue to remain in the red until it touches a production level of at least 20,000 vehicles. The Rs 1,300-crore (Rs 13 billion) accumulated losses it has written off this year, has helped to clean the slate but not really stem the bleed.
The company which completed its financial rejig a couple of months ago, which also paved the way for a capital infusion of Rs 420 crore (Rs 4.2 billion) from its Italian parent company, does not see any pick up in its sales in the current year. "We expect to close the current calendar year with a total car sales of 15,000-16,000 this year, the same as last year," said Ravi Bharadwaj, director commercial, Fiat India Pvt Ltd.
This, despite the launch of Petra, in both petrol and diesel version. The company is also planning to launch a stripped down version of the Palio in October-November. The project turnover for the current year is Rs 450 crore (Rs 4.5 billion).
Speaking on the sidelines of the launch of Fiat's c-segment offering Petra EL and ELX, which is replacing the failed Siena, Bharadwaj informed that the company is currently making 700 vehicles a month.
The company, which had peaked to a sales volume of 3,500-4,000 vehicles a month around October 2001, had invested in a second facility at Ranjangaon with an annual capacity for making 100,000 vehicles, to complement its Kurla plant with an installed capacity 65,000 vehicles.
Today, at 15,000 the company's capacity utilisation is at little over nine per cent. While the petrol version of the Palio accounts for 300-400 vehicles per month, the company is increasing its focus on the diesel segment, which it sees growing significantly.
In the 15,000 sales expected, the capacity for Petra will be 500 vehicles. Fiat will also work on standardising its dealership across the country and is putting in place a CRM programme. "We will have a toll free number from this month to address our customer calls," Bharadwaj said.
