This has been a busy week for Fiat. In the US, it has just taken ownership of Chrysler while it rolled out its 10 millionth car in Brazil. In India, the company is slowly consolidating its base in a joint venture with Tata Motors at the Ranjangaon plant near Pune. This facility, now home to the Palio and Linea, will see a new entrant in the form of the Grande Punto top-end hatchback, which debuts on June 17. “These days, a car launch is like your daughter’s wedding where you have to take care of so many things,” quips Mr Rajeev Kapoor, Chief Executive Officer, Fiat India Automobile.

What do you have to say about Fiat’s product line-up in India?
The Linea was the first locally manufactured car from the joint venture with Tata Motors. There was a lot of work in establishing the factory, building the team and network, as well as supporting infrastructure such as spare parts, after-sales service, training mechanics and so on.
The idea was to work on our earlier weaknesses, which explains why we were confident that the Linea would be a success. The next challenge is the volume-generating B segment where the Grande Punto, which sells huge numbers globally, is a right product. We said we would launch it in the second quarter of this year and are on time.

What kind of volumes are you targeting with this car ?
Predicting numbers in these uncertain times is difficult but we do expect to sell 2,500 units of the Grande Punto each month. The car is in the B-plus segment where it will have to compete with the likes of the Honda Jazz and Chevrolet UVA.

Do you think the Palio did not quite live up to expectations?
Well, the Palio has been doing small numbers. At the time of its launch, the Palio’s cost of maintenance was high, but was brought down later. I do think there was an issue with its image though it is a high performing car. Things are looking up with its new multi-jet diesel engine, but it is still to generate more volumes.

Likewise, with the Linea, are you disappointed that it is not selling the initially targeted 2,000 units a month?
The Linea has been doing 1,200-1,500 units (a month). Our initial target did not account for the slowdown but things will change for the better in four to six months. The Linea has a 14 per cent market share in its segment. We have 5,000 enquiries for the car but people are putting off buying now till the Budget is presented next month. From our point of view, the launch of the Linea was to re-establish the Fiat brand in India.

Are you targeting high localisation levels?
The Linea will be 90 per cent localised by December, while we will be more aggressive with the Grande Punto whose local content will be increased from 55 per cent to 85 per cent seven months after its launch. The Palio still has a level of imported parts.

Does Fiat plan to export aggressively from India?
The Palio is being exported to South Africa, while the Linea is being planned for all Commonwealth countries, including New Zealand and the UK, apart from South Africa. Our export target of 3,000 units this year for the Linea will be comfortably achieved. We have also begun exporting powertrains and have a commitment of 20,000 units this year.

How has the plant been planned for your products and those of Tata Motors?
Our Ranjangaon plant has a capacity of 1.6 lakh units. Fiat is accounting for 70,000 while the balance is meant for Tatas. We expect low capacity utilisation this year though. The total investments made in the plant are Rs 4,000 crore and we hope to break even by 2011-12.

How does Fiat propose to build its network?
We will have 100 dealers by June 17 (the day the Grande Punto is launched) selling Fiat and Tata cars. There will be exclusive bays for Fiat cars. Similarly, at workshops, there will be distinct areas for Fiat cars. Service centres and spare parts will also be part of this network plan. As car parks increase, we will have service facilities in suitable locations at Tata Motors Authorised Service Centres. We plan to establish 24 of these in the next three months.

Are three locally manufactured cars adequate in meeting your target of 70,000 units by 2010?
Obviously, if one wants to be a major player, one needs to bring in more products. We will have new models and different variants. The good news is that customers have far more confidence in Fiat. The fact that it has taken control of Chrysler reflects what its capabilities are all about.