The Telegraph
Since 1st March, 1999
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Fiat steps on gas to allay closure fears

Mumbai, June 20: Fiat India has adopted a novel strategy to quash rumours that it might close down its plant in Mumbai. The company announced the launch of another car model.

Financial magazine Economy had reported that the long-awaited turnaround plan for Fiat, the beleaguered Italian car major, would involve closing down its plant in Mumbai and scaling down its facilities in Spain and Italy. Fiat denied such a report from its headquarters in Turin.

“As far as Fiat’s India operations are concerned, the company stresses that no decision has been taken,” a news agency quoting a Fiat spokesman said.

Closer home, Fiat India officials were embarrassed by the news and were on the offensive.

“Work is on as usual at the Kurla plant (Mumbai). There is no plan to close it down,” a Fiat India spokesperson said. Going a step forward, Fiat India today said that a new petrol variant of the Palio, its flagship model, would be introduced next month, thus indicating that it is here for a long haul.

However, analysts tracking the industry are still sceptical. They say that other auto companies like Daewoo Motors and Pal-Peugeot had denied similar rumours only to down shutters later.

However, in the case of loss-making Fiat India, there is speculation that General Motors — one of its main shareholders — could step in by relocating its production facilities or by optimising and sharing manufacturing resources.

The new Palio model is being developed for the last six months and the company is ready for its launch next month. Details such as the name under which the new variant of Palio is to be launched and the advertising campaign to promote the car are being finalised, the company spokesperson said.

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