Latest Car News in India

Wednesday, November 30, 2011

By Pranjal Gera

Maruti to source up to 1 lakh diesel engines per annum from Fiat

The Italy based leading car maker Fiat will now be supplying up to 1 lakh diesel engines to the Indian auto giant Maruti Suzuki on per year basis. The news came after country’s largest car maker Maruti Suzuki announced that it has finalized a diesel engine supplying deal with Fiat. With this increased supply, the Indian auto giant Maruti Suzuki will now be able to raise the production capacity of its one of the most demanded hatchback Maruti Swift at its manufacturing facilities in Gurgaon and Manesar from the month of January next year.

Maruti Swift Pictures

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As per a recent statement given by Maruti Suzuki India’s Chairman, R C Bhargava, the company has been witnessing a major surge in the demand for diesel versions of its cars in the Indian market, due to continuously rising petrol prices. He added that the company hasn’t been able to meet this increased demand as it didn’t have capacity to produce more cars.

Maruti Swift Pictures

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Meanwhile, with a surge in demand for diesel run cars, the Indian auto giant Maruti Suzuki has increased the price of its diesel run cars by up to Rs 10,000. The decision of raising the price of its diesel run cars can be seen an advantage taking step from the Maruti Suzuki as the skyrocketing prices input materials has caused considerable shrink in the margins of the company.

 

Maruti Swift Pictures

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Moreover, the brand Maruti, that had been a synonym for small cars in India for more than two decades, is now facing tough competition from the new entrants in the segment including Chevrolet Spark and Beat from US based General Motors, Figo from US based Ford Motors, EON, i10 and Santro Xing from Korean Hyundai Motors, etc. The market share of the company has decreased widely from over 50 percent just a few years back to just over 40 percent. Moreover, the company has recently reported a decrease of up to 50 percent in its net profit, beating the estimates of industry analysts.

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