M&M and Tata Motors eyeying Fiat's plant

Tata Motors and M&M, the major players in the vibrant Italian auto market have shown interest in taking over the Termini Imerese plant owned by Italy’s largest car maker Fiat and are believed to have launched separate negotiations with Fiat. By 2011 Fiat will be relocating the Termini Imerese plant, preferably to cost-effective areas of Poland or Germany. The plant makes the Lancia Ypsilon (a three-door hatchback) and has a daily production capacity of 400 cars, and employs 3,500 people. Whereas, remaining 3,000 are engaged in vendor and related activities. Senior officials accompanying Italy’s Minister of Economic Development Claudio Scajola said, Indian investors, including Tata Motors and M&M, are welcome in Italy.

Regular manufacturing of passenger cars from Termini Imerese has become a costly affair for Fiat. The Termini Imerese plant will stop making cars when three-door hatchback is phased out early 2011. Fiat owns Lancia, a small volumes company which is restricted within Europe that makes four models — Delta, Ypsilon, Musa and Phedra. Since the 70’s, Fiat has made models such as Fiat 126, the original Fiat Panda as well as the Punto at the Imerese plant. The plant is the sole assembly site for Ypsilon since 2005 and in 2006 the vehicle became the four-millionth one to be produced there. The plant is the smallest of the 6 Italian plants owned by Fiat. In Italy alone, the company has 21,000 employees. This is unlike its India operation where the company has substantially increased production of cars and engines over the past two years and has launched numerous models. Chevrolet Beat and Volkswagen Polo are the upcoming cars in India.