Fiat and Maruti Suzuki India Ltd has expanded their contract for three more years, as per Live Mint. Maruti Suzuki has been sourcing diesel engines from Fiat since 2011, and the current deal expires in April-2015. Now as per the report, the contract for sourcing the 1.3-liter Multijet engine has been extended by three years now until 2018.

maruti-suzuki-fiat-extends-diesel-engine-contractMaruti Suzuki extends its diesel engine contract with Fiat

Fiat’s 1.3L MultiJet motor powers 5 cars from the Maruti range – the Ritz, Swift, Dzire, Ertiga and the SX4. Diesel variants of Maruti range, accounts for about for 33 percent (340,000 units) of brand’s sales in last fiscal year (which translates to about 340,000 units). Although, Tata, Chevrolet and Premier also source the Fiat 1.3L Multijet Diesel engine, it is Maruti’s sheer sales volumes that have helped make this engine ‘India’s National Engine’.

However, this extension of contract comes at a time when demand for diesel cars is substantially lower, owing to the fact that diesel prices might be completely deregulated by December, 2014; hence, the gap between the petrol and diesel prices is likely to diminish. But Maruti still remains confident about the market demand for diesel cars, hence, have extended its agreement with Fiat.

Maruti is readying new 800 cc two cylinder diesel engine for its upcoming commercial vehicle as well as the Celerio hatchback. This motor will be produced in the Gurgaon plant having an annual production capacity of 1.5 lakh units.

 
To read more on Maruti-Fiat diesel engine contract, Click here

 

Also see – Maruti Suzuki to import Fiat’s 1.6-litre diesel engine from 2014

 

SourceLive Mint