Fiat is setting up a group purchasing office in India as part of its strategy to cut costs by buying more components from low-cost areas.

Fiat said the move would help ensure greater competitiveness and better margins.

“We are optimistic on sourcing from emerging economies like India and China,” Gianni Coda, chief executive officer of Fiat Group Purchasing, said in 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 said.

Fiat, which set up a purchasing office in Shanghai last year, had plans to integrate purchase of components from Jan. 1, 2008, and aims to buy 8.5 billion euros 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,” Coda said.