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Old 29th November 2011, 22:35   #1
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Default Maruti seals deal with Fiat to source 100,000 diesel engines per year

Maruti finalises deal to buy 1 lakh diesel engines from Fiat per year

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NEW DELHI: India's largest car-maker Maruti Suzuki India has finalised a deal to buy diesel engines from Italy's Fiat. Fiat will supply up to 1 lakh diesel engines per year to Maruti. With this deal Maruti plans to raise Swift hatchback output from January 2012.
Source & Full Article - Maruti finalises deal to buy 1 lakh diesel engines from Fiat per year - The Economic Times

Last edited by GTO : 30th November 2011 at 10:20. Reason: Keeping fair usage policy in mind, please only include an excerpt + link to full article. Thanks
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Old 30th November 2011, 09:59   #2
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Default Re: Maruti seals deal with FIAT to source engines

High time MUL got not only more diesels, but larger diesels - 1.6, 2.0 & 2.5L units for their bigger cars.

Is this number over and above their own licensed capacity of diesels. What is not clear is where the diesel engines will be sourced from - India or Italy.

I hope that the Fiat India operations do not degenerate to an OEM engine operations, seeing that their car off takes are diving.
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Old 30th November 2011, 10:08   #3
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Default Re: Maruti seals deal with FIAT to source engines

^^^

Do we know if the deal is to purchase only 1.3 Multijet or the higher capacity 1.6 and 2.0 for SX4/GV?

It would be great to see a GV with 2.0 DDIS motor.
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Old 30th November 2011, 10:14   #4
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Default Re: Maruti seals deal with FIAT to source engines

But Maruti were planning for a tech-know-how tie up with VW.
And all they could seal is a deal to buy more diesel engines?
Marutis will continue to sell at a premium over other cars in the same range, esp the diesel ones.

No wonder the ZDi sells at a clean 40K premium over the Punto emotion.
If only the Punto was a little light and Fiat, a little aggressive, the Italians could have painted the Indian car scene red.
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Old 30th November 2011, 10:24   #5
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

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Originally Posted by Aroy View Post
What is not clear is where the diesel engines will be sourced from - India or Italy.
Fiat's Indian plant at Ranjangaon, Maharashtra. At last count, it had production capacity of nearly 3.5 lakh engines per year.

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I hope that the Fiat India operations do not degenerate to an OEM engine operations, seeing that their car off takes are diving.
Things are already looking that way. Fiat's turnover from engine sales is far more than what it makes from selling cars in India. Now, the brand is an engine supplier first, and then a car maker.
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Old 30th November 2011, 10:27   #6
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

I hope Fiat supplies larger capacity engines to Maruti, a 1.6 MJD SX4 would be awesome in rural areas, good GC,FE and a reliable service network, in short, everything the Linea does not have. The sales through Maruti should ensure more people with know how about the engine and eventually local mechanics who can service the engine. The spare parts should be made available over the counter, this will benefit Fiat buyers who have to depend on TASS.
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Old 30th November 2011, 10:35   #7
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

Let me add that Fiat as an engine supplier has kept them going

1: Fiat wriggled out of an unhappy alliance with GM by licencing its diesel engines to GM cars.

2: This provided an excellent revenue stream for Fiat

3: This now helps Fiat meets its fixed overheads in India by selling to Maruti as well as Tata
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Old 30th November 2011, 10:54   #8
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

The easiest way fiat finds new homes in India and also keep it's finance in green. And maruti, india's largest car assembler () takes another smart step that's gonna give sleepless nights to the competition.
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Old 30th November 2011, 10:57   #9
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

Overall a good thing to happen to Fiat with their plant thrumming with production and continued revenue stream. Even Maruti can de risk quite a bit on powerplant front in case of any strike and it seems its only for the 1:3 for now
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Old 30th November 2011, 11:08   #10
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Default Re: Maruti seals deal with FIAT to source engines

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Originally Posted by Aroy View Post
I hope that the Fiat India operations do not degenerate to an OEM engine operations, seeing that their car off takes are diving.
Just like Intel/AMD supplies processors but don't make PCs, Fiat, at least in India, seem to be going that way, though reluctantly.
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Old 30th November 2011, 11:15   #11
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

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Originally Posted by GTO View Post
Things are already looking that way. Fiat's turnover from engine sales is far more than what it makes from selling cars in India. Now, the brand is an engine supplier first, and then a car maker.
I look at it the other way around. If the powertrain unit (which has significant capex) is profitable, it strengthens Fiat India's ability to ask Fiat Italy to enable them to step outside Tata's sales network & set more customer friendly spares pricing policy.

Plus, when everyone knows that Fiat engines are powering Maruti cars, atleast one won't have to explain to their relative "oh does Fiat still sell cars in India?"

/I own a Motorola phone so I get the "oh does motorola still exist?" jibes all the time.
// I almost bought a fiat palio and know how general junta was questioning my decision at the time
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Old 30th November 2011, 12:10   #12
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Default Re: Maruti seals deal with FIAT to source engines

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Originally Posted by msdivy View Post
Just like Intel/AMD supplies processors but don't make PCs, Fiat, at least in India, seem to be going that way, though reluctantly.
Similar to Intel and AMD, if FIAT had stuck a deal to have a "FIAT Inside" or "Powered by FIAT" stickers or Logo's on Maruti's and TATA's, then it would have done wonders to FIAT's image in INDIA.
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Old 30th November 2011, 12:25   #13
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

Excellent business decision from both Maruti and Fiat.

maruti can reduce the number of people who run away from them due to the long waiting periods: Advantage maruti

Fiat can keep their assembly line (atleast for the engines if not the cars) running. Advantage Fiat.

I think Maruti stands to gain more since they do not have to scratch their heads to come up with a diesel engine now.
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Old 30th November 2011, 12:28   #14
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

Today i read it in ET (or maybe TOI) companies are not willing to invest in engine manufacturing facilities as the govt policy on Diesel and Petrol policy is flakey to say the least. One invests in engine building facility and then govt raises taxes on Diesel cars making them no more financially viable and what then would companies to with so much extra capacity.

Companies like Fiat which already are sitting on this facility are set to gain immensely from this period of transition, as other manufacturers would like to use this capability.
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Old 30th November 2011, 12:57   #15
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Default Re: Maruti seals deal with Fiat to source 100,000 diesel engines per year

So far Maruti has been manufacturing engines under license from Fiat. So they could brand the engine as DDiS.

Now, Maruti will be "buying" the engine directly from Fiat. So, will the engines be branded as DDiS or Fiat? I guess that Maruti will have license to manufacture X engines per year under license - maybe that is one reason why they haven't invested in increasing capacities. If these 100,000 engines still fall within the licensed capacity I guess they will be branded DDiS. What if these 100,000 is outside the licensed capacity?
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