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Aug 02, 2002

Local pick-up vehicle assembly considered

© Reuse this Italian automotive group Fiat is considering the possibility of assembling the Strada pick-up vehicle in South Africa, which would add to the assembly-line of its Uno, Palio, Siena and Weekend vehicles that are already produced in this country.

The local production of vehicles is complemented by the importation of the range of Alfa Romeos and the Fiat Seicento.

The five-door Alfa Romeo 147 was launched in the South African market on August 1 this year.

The move by Italian manufacturer Fiat Auto to introduce the sister of its popular and well-established three-door counterpart was the result of the automotive group's perception that the nature of the local market is similar to the European market, in which Alfa Romeo has a strong following.

The brand's local success will be supplemented in October this year when the company will release the latest Alfa Romeo 156 model into the South African market.

"We are emphasising the growth of the Alfa Romeo range because it will appeal to the South African driver and has the potential to satisfy this market," Fiat Auto SA MD Alberto Montanari remarks confidently.

Complementing Alfa Romeo is the Fiat 178 range, the design that forms the basis of the Fiat Palio, Siena and Weekend passenger vehicles. While the introduction of a new range of the 178 is predicted to materialise in a few years time, the cars will continue to be modified and upgraded as specified by the Fiat Group's international directives.

An estimated 800 000 of these passenger vehicles are sold worldwide each year and, comparatively, Fiat's total sales locally are dwarfed by this figure as the present sales figures for its product range span only 6% of South Africa's market, resulting in the effective sale of some 12 000 vehicles a year to the local market.

Montanari asserts that the Fiat brand, from the point of view of the consumer, is a well-priced car that has a solid reputation based on the concrete quality of the product. Diversifying its existing business is an area into which the firm is investigating as it hopes to unveil its Brazilian-manufactured Strada pick-up vehicle in South Africa after completing feasibility studies, which should be concluded by the end of November.

The Strada product has gained popularity among Brazilians since its introduction about four years ago.

Montanari notes that, while the market for this particular type of product is competitive, its nature is appealing and the South African market is the global benchmark in this niche facet of the automotive industry.

Moreover, the pioneer testing of the product took place in South Africa. In addition to its manufacturing facility, which is operated by Nissan, Fiat's local operations add a crucial dimension to the group's local initiatives.

Supplementing this is the Magneti Marelli component-manufacturing plant in Germiston, on the East Rand.

From this source, the exportation of Fiat's internally-used exhaust components is effected, thus its local manufacturing hub caters for about 25% of the total parts supply to its global operations for catalytic converters. Of the leather interiors used in Fiat's global manufacturing operations for the Alfa Romeo brand, over 50% of the product is sourced from its South African operation.

While the group's local activities are augmented by the importation of completely-manufactured products, exports of locally-manufactured vehicles would not be effective as the company's operative manufacturing hubs worldwide serve the international market adequately through the Fiat group's thorough considerations of the aspects of production and supply.

Because Fiat is export-orientated, the cost of transportation and taxes for operating in other countries is among the factors taken into account by the international company, Montanari explains. It is imperative that the cost-to-benefit ratio be considered by the Fiat group before it can begin production for export. At present, the manufacturing centre for left-hand drives in the 178 range, including the Palio and Strada products is run in Brazil, Poland, Turkey, Morocco, Egypt, China and Argentina.

The cross-shareholding between the Fiat group and General Motors (GM) creates another dimension to the company's need and is pivotal to the emphasis it places on the efficiency, expense and quality of its manufacturing process and final product.

For two years, the companies have maintained the status, with GM holding 20% of Fiat Auto and Fiat group controlling 6% of GM's worldwide operations.
Edited by: candice haase
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