Fiat to build Palio world car in India

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BOMBAY -- Italy's Fiat Auto will tie with its long- time India ally in a $557m passenger car joint venture that will debut with the 1999 rollout of the famed Palio world car, according to a proposal submitted for approval to the Indian government. Chaitra Leo Burnett, Bombay, handles the Fiat Uno account. An agency for the Palio has not been named.

Fiat of Turin, Italy, will hold a 74% stake and Bombay-based Vinod Doshi Group 26% in Fiat Auto India, a joint venture to be capitalized at $254m over seven years. Doshi controls Bombay- based Premier Automobiles, manufacturer under license of many Fiat models like the 1950s and '60s 1100 and 124 cars, and more recently, the Uno small car.

Fiat Auto, the seventh-largest car maker worldwide, successfully launched the Palio in Brazil last year and hopes to replicate the performance with new production centers in Argentina, Morocco, Thailand and now, India. Its intended plant site near Poona, 120 miles south of Bombay in Maharashtra state, will be capable of producing 100,000 cars a year.

Premier currently is 26% partner in Bombay-based PAL-Peugeot, a passenger car joint venture formed in the early 1990s with France's Automobiles Peugeot, which also holds 26%. Rhizic Communications, Bombay, handles PAL-Peugeot and other Premier cars.

Copyright January 1997, Crain Communications Inc.

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