Fiat India reports profits for the first time in 3 years

For the first quarter of this fiscal, Fiat India has reported a profit of Rs 22 crore. Earlier the company had reported a loss of Rs 166 crore for the same period last year. Fiat India is now satisfied with its growth and is planning big for the future. The revenues of Fiat doubled to Rs 967 crore from Rs 473 crore. Due to this profit, the Tata-Fiat 50:50 joint venture has become successful for the first time in three years. This joint venture had a cumulative loss of Rs 971 crore in the period from January 2008 to March 31, 2010.

Both Fiat India and Tata had invested a sum of Rs 4,000 crore in Ranjangaon for building a plant with a capacity to manufacture 1.6 lakh units per year. It was also decided that out of these units, 70,000 cars would be Fiat and the remaining would be Tata.

According to the company sources, the factors responsible for this positive growth in Fiat, include the increased capacity utilization and the extending joint dealerships. Presently, the sales network of Fiat and Tata consists of 170 dealerships which cover 130 cities and small towns. Fiat had produced 24,000 cars in the last fiscal. This year, the company expects to double this production, said Mr Rajeev Kapur, Chief Executive Officer (CEO), Fiat India. He also stated that they are bringing out 90 hp Punto, which will be the most powerful hatchback in the market, during the festival season. The high power version of Linea will also be launched around the same time. Mr Kapur further added that they hope to break even by financial year 2011-12.

The recent figures of growth have not only delighted Fiat but even Tata is glad to know about it. Mr Carl-Peter Forster, Managing Director and CEO, Tata Motors, commented that they are planning to strengthen the Fiat brand in India. He also said that soon an expansion will be noticed in Fiat's product range and marketing. Fiat also manufactures 1.3 multi-jet and 1.4 FIRE petrol engine at its powertrain facility at Ranjangaon. Last year, around 35,000 engine units were exported to Fiat Italy, the parent company of Fiat India.

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