Industry rumour that Italy's Fiat is looking for an alternative car assembly location in South Africa is "erroneous speculation", says the company.

Public relations manager Nancy Rispoli told that Fiat's contract with Nissan for Fiat 178 range assembly (which includes the Palio, Palio Weekend and the Siena) "is valid until 2006".

"There is absolutely no intention whatsoever on the part of Fiat SA to move assembly to the new plant in Kimberley nor to Delta in Port Elizabeth," said Ms. Rispoli.

She added that the Fiat/GM agreement in South Africa "only entails the development of efficiencies for the cost of local components - any other speculation is unfounded." Delta South Africa is now part of GM's global structure. says that there has been wide anticipation within the South African industry that the global alliance between Fiat and General Motors would eventually lead to a sharing of common vehicle platforms and production facilities.

Although no formal announcement has been made, it is widely expected that France's Renault will start vehicle assembly in South Africa in 2003. This would probably be at the Nissan plant as the French car-maker effectively controls Nissan and is rationalising its global production.

There has also been speculation that Fiat production would move from Nissan's site in Rosslyn near Pretoria although Ms. Rispoli said that the contract for this continues right through until 2006. Adding Renault assembly to the Rosslyn site before then would involve considerable expansion and investment at the plant.