[gshanky]

I came across this piece from Autoblog and have to say is a shocking but not surprising in the indian context since the relationship with TATA has still not brought in the numbers and moolah in car sales .

In 2010, Volkswagen purchased 19.9 percent of Suzuki, and the two have been working together in the form of a self-described comprehensive partnership. Apparently, "working together" means different things to the two automakers, however, because neither side is thrilled with the Japanese-German automotive tie-up. So much so, that Suzuki may be looking to take its talents to Italy.

Suzuki currently has a deal with Fiat, in which the Japanese automaker supplies its SX4 crossover for rebadging as the Sedici in Europe. There are reports that Suzuki is looking for ways to expand its relationship with Fiat, yet we've heard no word on whether the Italian automaker is interested in getting any cozier at this point.

Why is Suzuki ready to move on from Volkswagen? The automaker reportedly wants to get its hands dirty on some of VW's North American assembly facilities, but that hasn't happened yet. On the flip side, Volkswagen wants a piece of the Indian car market. Suzuki has strong roots planted in that market thanks to its partnership with Maruti. Both sides have clearly been expecting more out of this relationship, yet neither is happy. Suzuki has a lot more to lose, however, so expect to see it make a move sooner rather than later.

Source here - Suzuki fed up with Volkswagen, may partner with Fiat instead

[rajeev k]

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[blue_pulsar]

But isn't it the same thing as the JV with Tata? A prospective Grande Punto customer walks into a Maruti-Fiat dealership and the sales rep says "saar, buy the Swift. It is a Maruti and sells X times more than the Punto, its resale is Y times better, it is faster and its FE is more etc etc". Its not much difficult in India to convince a prospective Punto buyer to buy a Swift. Hardcore Fiat fans will buy it anyways, whether or not its a JV with Suzuki.

[MAS]

+1

There will not be much of a difference unless Fiat pushes for exclusive sales personnel in these showrooms. The service levels will definitely improve and so will customer confidence. I love the Fiat Linea and in spite of looking to buy a sedan under 12 Lakhs, I'm not even considering it due to TATA a.s.s.

@ FIAT: please wake up from your slumber and just by changing a few things you can be successful in India. The question remains… who will bell the cat?

[julupani]

I really dont see this happening. Its just speculation in my view. Suzuki like mentioned in the article has been working with FIAT before as well. If they had to they would have joined the partnership before.

Though FIAT's ownership of Chrysler, now makes the deal better for Suzuki.

Whatever the case, I doubt that the Tata-FIAT JV will break in anyway. The Tata-partnership is too strong to be broken this easily.

[drsnt]

I believe that the tie up might be more technical in nature than being model marketing, it may involve engines and platform sharing

[Rahulk76]

Source Italian carmaker Fiat may make diesel engines for Maruti Suzuki's Swift, Ritz, DZiRE and SX4 - The Economic Times

It's already mentioned in today's economic times

Italian carmaker Fiat will make diesel engines for Maruti Suzuki's popular line-up of cars at its Ranjangaon plant. With 85% of Swift, Ritz, DZiRE and SX4 sold run on diesel, Maruti is now looking to source diesel engines from outside after its captive capacity has failed to meet rising domestic demand.

[julupani]

We had been hearing about this for a couple of months now. Overall good news for the profits and revenues for FIPL, and thus for both Fiat SPA and Tata Motors. It will help keep the factory better utilised even during slump months.

But this cannot really be taken from the point of view of FIAT moving from Tata to Suzuki. Remember FIAT India is a 50-50JV between Fiat SPA Italy and Tata Motors. So Tata Motors would have agreed to this sale of engines, happily as it will help cut the losses they are making via FIPL.

[HammerHead]

To me it looks like Maruti is already on full throttle manufacturing their version of MJD and due to heavy demand for diesel engines they might look at Fiat to make X nos. of diesel engines for them. Apart from this nothing else in their mind!!

[vinay_ss]

There is a school of thought that the Tata Fiat JV is more inclined to sell powertrains, rather than the Fiat Cars. This news that MUL is planning to source Multijet diesel engines from the JV only furthers this view.

To my mind, its one thing to use your idle capacity to sell engines and keep the plant running. If i recollect correctly, the JV has a installed capacity to manufacture 2 lac powertrains per annum - which is huge, considering the current number of cars that the company sells. However, this also shows the inherent underlying threat that Fiat faces in India - known for its engines, rather than cars - no matter what they do, which cars they introduce, how many models they introduce or how better their service levels get - all because the Brand is known for engines, rather than cars.

cheers
Vinay

[julupani]

According to the article, this will still be the Suzuki version of the MJD only, but made in the FIPL facility. But as the basic engine is the same it can be made at Ranjangaon, only the Suzuki specific components will be added in a small "dressing line" in the Maruti factories, before it goes into the Maruti cars.

But as the engine manufacturing facilities changes, they will have to re-certify these cars in India before the FIPL built engines can be used.

Its just a business deal between FIPL and MSIL, to utilise FIPL's under-utilised facilities to make engines to be used in MSIL cars.
Of course, a major business area for FIPL is transmissions and engines, but most of it was for consumption of the two JV partners themselves, ie TML and Fiat.

[GTO]

Considering that Maruti is a 100 times bigger in India, the power of negotiation is in their court. Thus, we have to think : What would Maruti gain from such a partnership? Heck, they're getting the engines already!

Small car development synergies? I find that hard to believe as well. Maruti (and Japanese cars) are light & cheap, unlike Fiat (and European cars) that are typically heavier & more expensive. Plus, platform sharing can be accomplished even without a partnership on the lines of joint ownership.

In the longer term, I firmly believe that Maruti will develop its own diesel engines (unless they use an in-house partner's engines...like VW). It's unfathomable that a manufacturer selling 20,000+ diesel engine cars a month (and 80,000+ overall) has "outsourced diesels" in it's long-term strategy.

[partha379]

Originally Posted by GTO

In the longer term, I firmly believe that Maruti will develop its own diesel engines (unless they use an in-house partner's engines...like VW). It's unfathomable that a manufacturer selling 20,000+ diesel engine cars a month (and 80,000+ overall) has "outsourced diesels" in it's long-term strategy.

Maybe because Maruti is waiting for some clarity on the Govt's policy towards diesel pricing? Right now the sales mix might be skewed towards diesel cars due to the fuel pricing, IF and when the Govt acts this might change isn't it?.

[teamveevee]

Originally Posted by GTO

Small car development synergies?.

For the Indian market it could be Engine. But consider Suzukis US strategy. They are not able to sell their small cars in US, do not have a plant in US. [The news paper report mentions Suzuki wanted to assemble cars in the new VW plant in US]. Now Chrysler under Fiat, do need small cars, that too quickly, which Suzuki got. Chrysler got idle plants that can be shared with Suzuki. Fiat also started independent dealerships that just sells one car 500 (in addition to the existing Chrysler dealerships, which do not sell Fiat), how long Fiat can survive with just one model? . Suzuki needs money. They have small cars certified for US. So association with Fiat will be a win win for both Suzuki and Fiat in US and Japan. Fiat could eventually buyout VWs investment in Suzuki, if VW willing (which i doubt).

[vipul_singh]

I have been following FIAT's fortunes in the US for sometime now. I do not believe FIAT would badge engineer Suzukis in that market. They seem quite internally focused for now and have a long list of things to do (integration between Chrysler / Dodge and FIAT model line ups, for instance). Besides, they would not like to do anything which reduces FIAT's brand value in the US (something they are trying to build bit-by-bit)

While I am happy about the possibility of the new sourcing deal, I feel it is time for FIAT to come up with new engine families, ideally to introduce in their own cars, or if not, to sell as a supplier. Else, the advantage of the MultiJet and its status as India's 'National Engine' could get eroded as competitors come up with with equally capable or better offerings (think VW and Ford).