Mumbai, 08 May 2008: Fiat is setting up a group purchasing office in India, the Italian car maker said on Thursday. The move is a part of its strategy to cut costs by buying more components from low-cost centres such as India and China.

Fiat, which has a joint venture with Tata Motors Ltd for manufacture and distribution of cars, engines and commercial vehicles, said the move would help ensure greater competitiveness and better margins.

"We are optimistic on sourcing from emerging economies like India and China," Mr.Gianni Coda, Chief Executive Officer of Fiat Group Purchasing, said in a statement.

"The Fiat Group Purchasing Office in New Delhi will source components for all sectors, including Fiat automobiles, commercial vehicles and powertrains", he said.

"The centre will more than treble staff to 50 people by year-end from 15", he added.

Fiat, which set up a purchasing office in Shanghai last year, had plans to integrate purchase of components from January 1, 2008, and aims to buy 8.5 billion euros ($13 billion) worth of components from "best cost countries" by 2010, it said.

"This is a key step in the direction to achieve the group's 2007-2010 growth and margin expansion plan," Mr.Coda said.

The Fiat-Tata venture will make 2,00,000 cars in four years at a plant in western India, as well as 3,00,000 engines and transmissions in the fast-growing market.