Fiat will make diesel engines for an array of Maruti Suzuki cars such as Swift, Ritz, DZire and SX4 at its Ranjangaon plant. With 85 percent of the sales of these cars accruing from their diesel variants, Maruti is on the lookout to outsource the manufacturing of diesel engines after its captive capacity is unable to meet the growing demand.
Both the companies are close to signing a supply agreement after Maruti conducted a technical feasibility study of Fiat’s diesel engines. According to sources at both the companies, some technical changes would be carried out before Fiat engines can be fitted into Maruti cars.
According to Maruti Chairman, Mr. R C Bhargava, the company needs to do a lot of work before using Fiat’s engines in its cars. Apart from incorporating technical changes to meet their specific needs, Maruti also needs to technically certify the cars which will be launched with Fiat engine in India. Maruti Suzuki Managing Executive Officer (Marketing and Sales), Mr. Mayank Pareek, said that out of the 2,80,000 diesel engines produced at Maruti’s Manesar plant, around 45,000 are exported to Hungary, which creates a demand-supply gap on the domestic front. Thus, the carmaker is considering cutting exports by 1,20,000 engines to bridge the gap. Mr. Pareek also added that the company will cut diesel engine exports to Hungary in the next six months and use those engines to meet the domestic demand.