Monday, November 14, 2011
By Pranjal Gera
Tata Motors mum over Maruti Suzuki-Fiat India diesel engine agreement
Maruti Suzuki India intends to purchase diesel run power-trains from Fiat Motors and after some initial round of discussions between the two in regards to signing of a diesel engine supplier agreement the same is under progression. The Italian auto maker Fiat India has a fifty-fifty alliance with nation’s auto giant Tata Motors, also both together own engine and transmission manufacturing unit in Ranjangaon, Pune. Also, among the 10-Board members there are five representatives of Tata Motors and another five of Fiat India.
Maruti Suzuki India has settled on to obtain 1.3L multi-jet diesel power-train manufactured by Fiat India. The largest passenger carmaker has an immense demand for diesel powered engines in hatchbacks Ritz and Swift along with SX4 and DZire sedans.
On the other side the same engine is put to use in their own models such as Tata utilize the same in Tata Indica Vista and Tata Indigo Manza sedan, along with Fiat applying the similar engine in Grande Punto and Fiat Linea apart from selling it overseas.
The diesel variant vehicles under Tata banner; especially Indigo and Indica, consists of nearly fifty percent of overall sales and are in straight competition with Maruti’s diesel line up, which has great demand from its consumers, but could not cater the same due to unavailability of diesel component supplies and could only comprise around 23 percent of diesel vehicle sales.
Looking at this scenario, the concern rises that the things are not that straight forward as it appears, and there are some obstacles on the way to signing this contract for Maruti Suzuki India
Although, a top official from Maruti Suzuki said that the stand from Fiat is very positive and is fast approaching towards finalizing the bond. On asking about Tata Motor’s opinion on the same, he said its Fiat India’s concern to have a talk with them.
Tata Motors representative when asked about the deal refused to comment and said that it’s an internal business matter of the firm.