Fiat India Recovering From Loss Has Become Profitable For The First Time In Three Years

Increased production capacity and dealership enlargement has helped Fiat India to get a higher growth in the Indian market. At present Fiat and Tata have a sales network of around 170 dealerships covering 130 cities and small towns.

Fiat India recently has announced Rs. 22 crores profit for the first quarter of this financial year. Earlier Fiat had reported a loss of Rs. 166 crores for the corresponding period of last year. In this period, revenues doubled to Rs. 967 crores from Rs. 473 crores, making the Tata-Fiat JV fruitful and productive for the first time in three years.

The JV had incurred a total loss of Rs. 971 crores from January 2008 to March 31, 2010, of which the loss of Rs. 272 crores was in the last fiscal. Fiat India had invested Rs. 4,000 crores in Ranjangaon to build a manufacturing facility with an annual capacity of 1.6 lakh units. From this manufacturing facility 70,000 cars would be of Fiat and rest of Tata.

Previous fiscal, Fiat menufactured 24,000 cars and this year the company hopes to double the production, saya Mr Rajeev Kapur, Chief Executive Officer (CEO), Fiat India.

“We are bringing out 90 bhp 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. We hope to break even by financial year 2011-12,” are the words of Chief Executive Officer (CEO), Fiat India Mr Rajeev Kapur.

The news has brought happiness in Tata camp as well. Mr Carl-Peter Forster, Managing Director and CEO, Tata Motors, said, “We are looking to strengthen the Fiat brand in India.” He said that Fiat’s product range and marketing is expected to spread the wings. Tata Motors’ investment in Fiat India stood at Rs. 999.54 crores as on March 31, 2010.