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January 20, 1998


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Spaghetti Knot!

Fiat to sell Alfa Romeos in India; Piaggio ties up to make
two- and three-wheelers

send this story to a friend Kevin James in New Delhi

Italian auto giant Fiat Spa is planning to introduce its world famous Alfa Romeo 156 in India in the near future, to cater to the luxury and high-end segment of the market.

According to company sources, Fiat is planning to sell the Alfa Romeo 156, which has captured the imagination of the globe as a racy and sleek sports car, in the Indian market as a completely-built unit in the coming year. The car, which has just won the European Car of the Year award for 1998, costs around $35,000 in Italy.

However, the company has not yet decided on how many cars it will import and what will be the final price for the Indian market. An official said that Fiat was currently doing a feasibility study after which it will be able to tell the final price of the car in Indian rupees. The cost will take into account lading costs, freight, duties and the potential demand the cars are likely to have in India.

However, as the Fiat group follows a differential pricing system in various countries for the same model, chances are that the car may be introduced at a lower price in the Indian market initially. The cars will be shipped in from one of the nine countries where Fiat has set up its manufacturing bases.

Incidentally, Fiat is which setting up a new factory at Ranjangaon, Maharashtra, to manufacture the Model 178 with an installed capacity of 100,000 units a year. Model 178 is also known as Fiat Palio, Siena and the Palio Weekend. The initial investment in this will be to the tune of $370 million. Fiat, which is displaying the Alfa Romeo 156 at the Auto Expo '98 in New Delhi, will not be manufacturing the same in India as the market for it is very small.

And to utter disappointment of the fans of Michael Schumacher and the grand prix, Fiat will not be introducing the Ferrari in India, arguably its most famous product. Explained the Fiat official, "Ferrari is essentially a vehicle meant for car lovers and not just for those are loaded with money. Thus, there may not be a genuine demand in India for it."

But money too matters as far as a Ferrari is concerned. In Italy, a Ferrari sells for $250,000, a massive amount for even the diehard car lover. Certainly, at that incredible price (approximately Rs 10 million), there is a serious doubt about just how many Indians can afford to buy and maintain such a car. Besides, as the official pointed out, correctly, Indian roads are simply not good enough for a Ferrari.

Meanwhile, in another Italian connection, Greaves Limited, the Rs 8 billion company part of the Thapar Group, has entered into a joint venture with Piaggio Spa of Italy, Europe's leading two- and three-wheeler manufacturer, for making a new generation three-wheelers for passenger and light transport applications in India.

According to the joint venture agreement, a new company -- Piaggio Greaves Vehicles Pvt Limited -- will be formed for manufacturing the new vehicles. The joint venture company will be operational by beginning April 1998 and the first three-wheeler from its plant is expected to roll out by the latter half of 1998.

Piaggio Spa will hold 51 per cent equity and Greaves Limited will hold the rest. Both companies will make an initial investment of approximately Rs 150 million in the first phase.

The existing facility at the Greaves plant in Baramati, Maharasthtra, will constitute the main manufacturing base for new joint venture.

In the initial stages, Piaggio Greaves will focus mainly on the manufacture of 3-wheelers. Later, larger capacity three-wheelers for passenger and cargo will also be added to the product portfolio. The speciality of the new three-wheeler will be customised build-up of load carriers with multi-applications.

According to a senior official of Greaves, the new company aims at creating a hub in India for distribution of these vehicles to the global market. Greaves Limited will export this three-wheeler to Sri Lanka and Nepal, while Piaggio will market the same in the other regions, utilising its worldwide network.

The company plans envisage manufacturing capacities of 50,000 vehicles within two to three years of operation, which will be progressively enhanced to meet the demand.

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Small is Beautiful! Daewoo's 'jeans among cars'
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Hyudai Santro shown off
Mercedes Benz A-Class for India

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