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Fiat moving towards stake hike in Ind Auto

The Foreign Investment Promotion Board has allowed Fiat Spa of Italy to subscribe to preference shares worth Rs 1.06 billion in Ind Auto Limited, which, if converted to equity, will raise the Italian giant's stake from 51 per cent to 81.4 per cent.

Though Fiat is not making any immediate move towards hiking stakes in Ind Auto, the Italian company has, in its application to the FIPB, stated that it was not averse to the idea of converting the joint venture into a wholly-owned subsidiary. The preference shares can be converted into equity shares at any point of time.

Ind Auto is a joint venture between the Doshi-run Premier Automobiles Limited and Fiat India Automobiles Limited, a wholly owned subsidiary of Fiat Spa. FIAL has the controlling 51 per cent stake in the venture while the Doshis hold the rest of the Rs 650 million share capital of Ind Auto.

The FIPB has also allowed Fiat to extend the maturity period of the preference shares.

Meanwhile, FIAL is all set to roll out its three-box car, Siena, with a base price of Rs 600,000. Bookings should begin by April, company sources said.

Four versions of the Siena are to be launched in India, with prices between Rs 600,000 and Rs 700,000.

The Siena is part of the Italian auto giant's world car project under which two more cars -- the Palio and the Palio Weekend -- are to be introduced in India. The Palio will be launched in the second half of next year, the spokesperson said.

The range to be introduced in the Indian market comes with two different engines -- a 1.2 multi-point injection fire petrol unit and for Siena and a 1.7 turbodiesel unit. Air-conditioning is a standard feature in both versions. The 1.2 MPI petrol engine is fitted to the Siena and the Palio.

Fiat Spa had earlier planned to produce the world cars from a new unit being set up at Ranjangaon near Pune. However, in view of the severe recession, Fiat had stalled work at the unit and shifted the production base to Premier Auto's Kurla unit in Maharashtra.

The Kurla plant currently produces the Padmini and the Uno. The company has already set up separate assembly lines for the Siena and trial production of the car began in December-end. The plant has a total capacity of 60,000 cars, divided between the three models.

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