Fiat agreed to provide 1 lakh diesel engines to Maruti Suzuki

Italian carmaker Fiat and Japan's Suzuki Motor Corporation have signed an contract to provide one lakh diesel engines to Maruti Suzuki India, which will assist the country's largest car maker to manufacture more engines.

Then the two auto giants contracted to supply Fiat's 1.3 litre-multijet engine - approved by Fiat India Automobile, which is a joint venture between Fiat and Tata Motors - to Suzuki's Indian arm, Maruti Suzuki India.

The JV Company will deliver up to 100,000 engines yearly to Maruti beginning January this year for a time of three years. The production of multijet 1.3 litre engines for Maruti Suzuki will commence in the fourth week of January at Fiat India Auto's Ranjangaon plant in Pune, and supplies will start again at the earliest. The supply of these engines got stuck on pricing issues.

This development will give a relief to Maruti, which has over 1,10,000 consumers waiting in the queue to get delivery of its largest selling car, Swift. The company is gearing up to raise production at the Manesar plant to deliver more diesel cars.

A senior Maruti Suzuki offical told ET, "Swift will absolutely get favored treatment, and we are confident of crossing 20,000 units of Swift in a month. And with the new Swift Dzire in the pipeline, extra deliver of engines would be of huge help to make our customers sooner."

Starting January, Suzuki Powertrain - a subsidiary of Maruti Suzuki - will begin producing 5,000 more units a month, and the extra 8,000 engines from Fiat's Ranjangaon plant would mean, there will be extra 13,000 more diesel engines at the removal of Maruti Suzuki, which would help the carmaker clear some of its backlog.