Fiat to conclude agreement with Suzuki for diesel engines image

Fiat, on Tuesday said it expects to conclude shortly discussions with Suzuki for the supply of diesel engines for passenger vehicles, a step that will allow the local unit of Suzuki Motor Corp. cut the waiting period on its Swift model.

It is expected that Fiat will start manufacturing the diesel engines for Maruti Suzuki from January 2 and those engines will be dispatched by second week of January.

Following the global spat between Suzuki and Volkswagen, the company would not have to rely on the German automaker’s superior diesel engine technology to power its diesel car ambitions.

This was the major attraction for Suzuki since it sold a nearly 20% stake to Volkswagen in December 2009 in lieu of sharing its frugal technology with the German OEM for manufacturing small cars.

Fiat India, equally owned by Fiat SpA and Tata Motors Ltd., has the capability of producing approx. 300,000 diesel and petrol engines every year. The car company also serves as a supplier of diesel engines to Tata Motors

The share of diesel cars sold in India gained six percentage points to 23 percent in the past eight months of the current fiscal as the difference between the prices of petrol and diesel widened to as much as Rs.30 ($0.57) a liter .