Maruti extends the diesel engine sourcing agreement with Fiat

The engine sourcing agreement by Maruti Suzuki India Ltd from Fiat SpA, ending on April 2015, has been extended for three years. Maruti Suzuki has been sourcing 1 lakh units of the 1.3 litre diesel engines from Fiat, annually, since January 2012. Maruti also produces 3 lakh units of the Fiat engine at its Manesar plant, under a licensing agreement.

The 1.3L diesel motor powers 5 cars from the Maruti stable - the Ritz, Swift, Dzire, Ertiga and the SX4. Although, Tata and Chevrolet also source the Fiat 1.3L Multijet Diesel engine, it is Maruti's sheer sales volumes that have helped make this engine 'India's National Engine'.

The difference in terms of sale numbers of petrol and diesel cars is reducing significantly, owing to the fact that diesel prices might be completely deregulated by December, 2014; hence, the gap between the petrol and diesel prices is likely to diminish. However, Maruti still remains confident about the market demand for diesel cars, hence, have extended its agreement with Fiat.

A new 800 cc two cylinder diesel engine has been developed by Maruti to power its upcoming commercial vehicle as well as the Celerio hatchback. This motor will be produced in the Gurgaon plant having an annual production capacity of 1.5 lakh units.

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