Maruti signs deal with Fiat to procure 1 lac diesel engines

Thursday 19 January 2012, 12:05 PM by

On 18th January 2012, Maruti Suzuki and Fiat India signed a deal wherein the latter will provide 1 lac diesel engines on a yearly basis to the former for the next three year. The Italian car maker will start manufacturing the 1.3 litre diesel engine demanded by Maruti from January end this year at its plant in Ranjangaon, near Pune.

This agreement will help India’s largest car manufacturer in increasing its sales and consequently decrease the waiting period on its diesel cars. The company’s popular Swift hatchback diesel model has a long waiting period of up to eight months, with around 1,00,000 customers waiting for deliveries.

The company stated that, “The parties have reached a further agreement for the supply of Fiat’s 1.3L ‘MultiJet’ small diesel engine produced under licence by Fiat India Automobiles.” However, the two companies did not reveal any financial facts of the deal. Nevertheless, this deal will surely bring a sigh of relief to Maruti, which is planning to increase production at its Manesar plant so that it can deliver more diesel cars.

According to a company official, the company is hoping to sell more than 20,000 units of the car every month, further underscoring the need of new engines for the car. He further said that, “And with the new Swift DZire in the pipeline, additional supply of engines would be of immense help to reach our customers faster."

Maruti Suzuki’s subsidiary, Suzuki Powertrain, will begin working on developing 5,000 extra diesel engines a month from this January. With Fiat supplying an additional 8,000 diesel engines to Maruti, the company will have 13,000 diesel engines to clear the backlog and focus more on diesel vehicles.