In a move that would help Maruti Suzuki meet the high demand for the diesel versions of cars such as the Swift and Dzire, the carmaker has tied up with Fiat for sourcing one lakh diesel power plants annually over three years.
Beginning this month, the agreement will help the car market leader ramp up output of its diesel variants. This will help it improve languishing monthly sales volumes and reduce waiting period on many models. Over the past year, Maruti has been unable to increase its own capacity for diesel engines, even as demand has significantly shifted in favour of diesel cars because of a lower ownership cost.
“Fiat and Suzuki Motor are continuing to expand their existing fruitful long-term business relationship. The parties have reached a further agreement for the supply of Fiat's 1.3L MultiJet 75hp BS-IV Small Diesel Engine produced under licence by Fiat India, the joint venture between Fiat and Tata Motors, to Suzuki's affiliate company Maruti Suzuki,” an official statement said.
Maruti's affiliate company Suzuki Powertrain also makes similar 1.3-litre diesel engines for its models, with a capacity of 20,000 a month, which is being expanded to 25,000. The proposal for a new plant is also expected to come up at Maruti's board meeting on January 23. These engines are also Fiat-designed, but produced under licence by Suzuki.
In models such as the Swift, Dzire, Ritz and SX4, demand for the diesel variant accounts for 85 per cent of the total. Diesel cars are high in demand since June, 2010, after the previously Government-controlled petrol prices were freed. This led to the subsidised diesel prices become subsequently became cheaper by about Rs 25 a litre.