Fiat India will invest Rs 2,341crore to increase capacity at its Ranjangaon plant in Maharashtra, the company said on Monday. Fiat India, a 50:50 joint venture between FiatSpA and Tata Motors, has till date invested Rs 1,671 crore in its Pune facility. The company signed a memorandum of understanding with the state government today to ramp up production and conduct backward integration in its plant. The total investment in the plant now stands at Rs 4,020 crore.After signing the agreement, Maharashtra chief minister Vilasrao Deshmukh said the new initiative would provide employment to 4,000 people. Fiat India chief executive Rajeev Kapoor said the agreement will help it meet increased customer demands and simultaneously facilitate backward integration.Fiat India will enhance the capacity of its Ranjangaon facility to manufacture 2 lakh cars, 3 lakh engines and 3 lakh parts and accessories. At present, the facility has a capacity to manufacturer 1 lakh cars and 2 lakh engines and transmission parts. The increase in capacity will cater to the increased global demand for Fiat’s engines. The MoU will also aid in the production of the 1.3 multi-jet engine, which was recently launched by the company in its Palio Stile, Fiat India added.The reduction in excise duty from 16 per cent to 12 per cent on small cars, proposed in this year’s Union Budget is expected to boost the demand for the company’s cars. Fiat plans to launch around four car models this year, including the Linea and the Fiat 500. The Ranjangaon plant will produce the 1.3 litre and 1.9 litre multi-jet diesel engines, besides 1.2 and 1.4 litre petrol engines.Both Tata Motors and Fiat say the capacity expansion has been undertaken targeting the international engine supply market.
