This month, Fiat India will launch the diesel version of the Petra, launched earlier this year. The car will be initially be launched in the southern cities of Chennai, Hyderabad and Bangalore before the company launches it on pan India in September this year. After withdrawing the Siena, which proved to be a damp squib in the Indian market Fiat introduced the Petra (petrol version) in May this year. The diesel Petra will take on the diesel variants of the Tata Indigo and the new Maruti Esteem and is expected to be priced in the Rs4.78 to Rs 4.90 lakh range (ex-showroom).

This will be Fiat''s first diesel offering in the C segment.Built on the redoubtable Fiat 178 platform, the Petra diesel version will be powered by a 100 bhp 1,900cc engine.

Recently the Bombay High Court sanctioned the financial restructuring of Fiat India and wrote off over Rs 1,300-crore of accumulated losses from the company''s existing equity capital of Rs 1,368 crore and a subsequent infusion of Rs 420 crore as fresh equity by its parent.

A sharp drop in car sales resulted in record losses for Fiat India in 2002.

Fiat is also looking at introducing a stripped-down version of its latest product ''Panda'' — a roaring success in European markets — in 2005 in India.

Company sources say Fiat''s plan is to make India a sourcing base and step up exports from the country. They say exports from the country make financial sense, since production costs are substantially lower here.