RIO DE JANEIRO - Fiat Auto remains committed to growth in emerging markets, said Managing Director Roberto Testore.
Fiat will continue the strategy 'even in times of difficulty,' said Testore. 'We believe real expansion will be seen in countries such as Brazil, India and China.'
Testore was speaking at the launch of Fiat's face-lifted Palio world car range here.
Despite Brazil's economic problems, 'we continue to believe in this country,' he said. 'From 1997 to 2000, Fiat has invested something like $1.5 billion in Brazil.'
Testore said the future of the auto industry does not lie in Europe, the USA or Japan. In those regions, 'annual growth rates [in the new-car market] of 2 to 2.5 percent or lower are forecast,' he said.
'The future lies in South America, eastern Europe and continental Asia,' said Testore. 'In those areas, the new-car markets are destined to grow by 5 to 7 percent a year - or more.'
That growth will be fueled by healthier economies and increases in population, said Testore.
Speaking about the March alliance with General Motors, Testore said it 'does not, as some people have claimed, represent the first step in Fiat's withdrawal from the car industry. If anything, it is the exact opposite. The logic behind the alliance is to be competitors in the market, but at the same time allied against costs.'
Testore said Fiat and GM intend to achieve economies of scale worth E2 billion, split equally between the two partners, by 2005.
'The alliance is based on synergies and cemented by the creation of two 50-50 joint ventures, one in purchasing and the other in the production of engines and gearboxes,' said Testore.
The joint ventures are called GM-Fiat Worldwide Purchasing and Fiat-GM Powertrain.
'The joint ventures have been given the go-ahead by the antitrust authorities in Europe,' said Testore. 'In South America, we are moving rapidly on to the implementation stage.'
Fiat and GM named the management teams of the two joint ventures at the beginning of this month.
'Product innovation also continues at a fast rate,' said Testore. 'We need to be able to respond rapidly to customers' increasingly diversified demands.'
The answer, he said, is to 'respond to complexity with simplicity - creating products with outstanding standard features that adapt readily to customization.'
Fiat also intends to become more of a service provider, said Testore.
'The customer does not just buy a car, he buys mobility,' he said. 'Loans, insurance and aftersales service are just different paragraphs in the same chapter. We will create more new services that offer the same quality everywhere - and the same ability to interpret customers' needs.'