The Doshis of Premier Automo-biles are set to launch intense negotiations this week to try to find a white knight for their beleaguered joint venture with Peugeot, PAL-Peugeot Ltd.
Consultations within the Doshi family have already begun following PAL-Peugeot vice-chairman Maitreya Doshis return to Mumbai on Saturday from Paris. Doshi was not available for comment. However, PAL sources said Peugeot had mandated them to recast the French companys 32 per cent stake in PAL-Peugeot.
The companys board meeting on Wednesday is expected to discuss buyers for Peugeots stake in the company. Fiat of Italy is a leading contender as Premiers new partner in PAL-Peugeot after the French auto giant announced late on Friday that it was pulling out of the company.
Fiat has stated that if would be willing to become Premiers partner and utilise PAL-Peugeots Kalyan plant if concessions similar to those offered to Fiat at its Ranjangaon plant, near Pune, are extended to the Kalyan plant.
However, Maharashtra government sources ruled out any such sops for the Kalyan plant. We are willing to give them sops for setting up the Palio manufacturing facilities at Ranjangaon only, they said. The sops agreed upon are only for Ranjangaon and nowhere else, a senior government official confirmed.
Sources close to Fiat said the company was studying its options and had not yet taken a decision on the issue.
Fiat has been scouting for a site to manufacture the Palio world car. It had zeroed in on Ranjangaon after the state government had proposed a generous dose of concessions.
Industry sources and analysts now say it makes sense for Fiat to buy a stake in PAL-Peugeot and utilise the Kalyan plant for the world car project. The plant is big enough for start up operations with a capacity of 60,000 cars.
The Kalyan plant would enable Fiat to speed up the Palio launch, slated for late-1999 at present. A leading Mumbai-based auto analyst said Fiat could launch the Palio in as little as six months if it starts operations in Kalyan now.
