Maruti Suzuki India Ltd.

Maruti Suzuki, the country’s largest car maker has inked pact with Fiat for sourcing one lakh diesel engines annually over three years. Fiat is going to supply its 1.3L MultiJet 75hp BS-IV Small Diesel Engine produced under license by Fiat to meet the high demand for the diesel versions of cars such as the Swift and Dzire.

The agreement will help Maruti to improve languishing monthly sales volumes and reduce waiting period on many models. Over the past year, Maruti has been unable to increase its own capacity for diesel engines, even as demand has significantly shifted in favor of diesel cars because of a lower ownership cost.

Maruti's associate company Suzuki Powertrain also makes similar 1.3L diesel engines for its models, with a capacity of 20,000 a month, which is being expanded to 25,000. The proposal for a new plant is also expected to come up at Maruti's board meeting on January 23, 2012. These engines are also Fiat-designed, but produced under licence by Suzuki.

Demand for the diesel variant accounts for 85% of the total in models such as the Swift, Dzire, Ritz and SX4. Diesel cars are high in demand since June, 2010, after the previously Government-controlled petrol prices were freed.