Italian carmaker Fiat will make diesel engines for Maruti Suzuki’s popular line-up of cars at its Ranjangaon plant. With 85 percent 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.
Maruti already has a licensing pact to produce Fiat’s 1.3 multi-jet diesel engines at its Manesar facility since 2007, which initially fired Swift and was later strapped on to DZiRE, Ritz and SX4 models. This engine was sourced directly by Maruti’s parent Suzuki Motor Corp from Fiat Italy.
Both companies are close to signing a supply agreement after Maruti carried out a technical feasibility study on Fiat’s diesel engines a few months ago.
Sources in both companies said some technical changes were likely before any Fiat engine could be strapped on to a Maruti car. “Some parts are different on Fiat’s multi-jet engine that will need to be taken care of before we strap it on its cars,” a senior Maruti executive said.
Maruti chairman R C Bhargava said: “We need to do a lot of work before going for these engines. Besides technical changes to meet our needs, we need to homologate (technically certify) our cars again to be launched with any Fiat engine in India." Of the 280,000 diesel engines produced at Maruti’s Manesar plant, about 45,000 are exported to Hungary, creating a domestic demand-supply gap. The carmaker is considering cutting exports to bridge the shortfall of about 120,000 engines. “We will cut diesel engine exports to Hungary in the next six months and divert the entire supply to the domestic market,” Maruti Suzuki managing executive officer (marketing and sales) Mayank Pareek said.