Besides, the group is also exploring the feasibility of venturing into the retail car financing business through its subsidiary `Fidis'. Fiat's treasury arm is also planning to foray into the insurance sector as and when the government clearance is granted.

The company is presently conducting a feasibility study for this purpose, Fiat International's senior vice-president Andrea Simoncelli told newspersons today. He said US $ 1 billion would be utilised for different activities, which includes refurbishing its existing Kurla plant, where the UNO is being produced, supporting installation of foreign suppliers as well as Fiat subsidiaries which include New Holland, Magnetti Marelli.

"The expenditure plans to cover all the main areas of activities of the group. Of the US $ 1 billion,around US $ 200 million would be invested in the country by 1998-end," he said.

Under the world car project for which the plant has been set up at Ranjangaon near Pune, the company would be introducing a family of five cars sharing the same platform and a number of major components. The modular project consists of the Palio Hatchback, Siena Saloon and the Palio Weekend Station Wagon, all three of which will be manufactured in India. The other two members of the 178 family are a pick-up version and a van.

In this plant which will have an annual capacity of one lakh vehicles, the Italian auto maker will be investing US $ 370 million in the first phase and US $ 130 million in the second phase. The facility is owned by Fiat India Automobiles Limited (FIAL), a wholly owned subsidiary of Fiat S.P.A. The production is scheduled to start in end-1999.

Regarding the company's indigenisation programme, Simoncelli said around 40 of Fiat's international vendors would be setting up shops in India for the world carproject. "As per the Memorandum of Understanding signed with the Directorate General of Foreign Trade (DGFT), we will be achieving 70 per cent local content level within the stipulated period of five years. But our aim is to exceed that level."