Maruti Suzuki which has been experiencing a horde of troubles all at once since early 2011 is now banking on its diesel powered car models to increase sales and regain lost grounds. The company has incurred significant production losses due to labor strikes at its Manesar manufacturing facility. Moreover, the slowdown in the automobile industry spurred by hike in fuel prices and interest rates has resulted in the decline of Marut Suzuki’s market share from about 45 percent to 40 percent in 2011.
However, even with the hike in the fuel prices, there remains a difference of almost Rs. 30 between the prices of petrol and diesel, petrol being costlier. Hence, in spite of the slowdown in sales in the auto industry, the diesel powered car sales have gone up drastically and the same has been utilized by Maruti Suzuki to recover its sales.
Foreseeing the increase in demand for diesel powered cars, Maruti Suzuki entered in a deal with Fiat to source 3,00,000 diesel engines till 2014 by which it would establish its own diesel engine manufacturing facility. It already has a dedicated source of diesel engines namely Suzuki Powertrain which is a joint venture with Suzuki Motor Corporation providing it with 1,00,000 diesel engines annually.