Italian car maker Fiat is likely to start supplying multijet diesel engines to the Indian market leader Maruti Suzuki by February, following a deal expected to be inked by the end of this month.
This will allow Maruti to clear faster its backlog of about 150,000 bookings, nearly 100,000 of which are for diesel-powered cars, mainly the Swift hatchback and the Swift Dzire mid-sized sedan.
The two companies were expected to sign the agreement for 100,000 engines annually by the end of last year, but Fiat needed a nod from its joint-venture partner Tata Motors to supply engines from their Ranjangaon plant.
Fiat has received the go-ahead from Tata Motors and it is likely to start by supplying 7,000 to 10,000 engines next month.
"We are at the final stages of signing the deal," S Nakanishi, managing director of Maruti Suzuki said. "We are currently negotiating the prices and hopefully by the end of the month, we will be through with the agreement."