Don't fritter away forex reserves - Fiat chief

By Our Special Correspondent

CHENNAI, JAN. 7. India should not fritter its foreign exchange resources on import of cars and instead should try to make quality cars and components for export and thus earn foreign exchange, according to Mr. Paolo Cantarella, CEO of Fiat SpA, Turin.

Expressing this view when asked by mediapersons today for his opinion on whether used or second-hand cars should come under the multilateral tariff reduction measures, Mr. Cantarella said India should try to attract foreign investment for production of quality cars and components and thus improve its capability for export.

Mr. Cantarella, who was earlier conferred the honorary degree of Doctor of Science by Anna University (a technical/engineering university), said during his chat with presspersons that cars, trucks and light commercial vehicles were promising areas in the Indian automobile market. In the car industry, Fiat would focus on producing vehicles for the ``first cycle of motorisation for young Indian families'' (apparently meaning entry level cars). But the growth of the automobile industry would ultimately depend on improvement in the infrastructure.

He welcomed the decision of the Indian government to introduce full-fledged value added tax (VAT) and said this would help the growth of the industry, including supplier units. His company considered India, with its strong education system, one of the bases for its ``globalisation strategy''. The fact that Fiat group companies had invested in a wide gamut of activities including engines, tractors and construction, foundries, and automobile finance, on their own or as joint venture partners, showed the group's commitment to India, where a total of $500 million investment had been made so far. The companies included Fiat Auto, Ind Auto, Iveco Trucks, Magnetic Marelli, New Holland and Case, Teksid Foundries, Comau and FISAF.

Mr. Cantarella said Fiat was deeply involved in development of the diesel engine segment and alternative fuels like methane in Europe. It had recently entered the information technology industry through a new company, Ciaoweb, and India as a leader in the software industry would be ``looked at'' for opportunities in future.

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Section  : Business
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