Click it and Unblock the Notifications
Maruti To Buy One Lakh Diesel Engines From Fiat
The deal is a result of increased demand for diesel cars in recent times. While carmakers usually have a 80: 20 ratio of production of petrol cars against diesel cars but demand for diesel cars has been exactly opposite. We had earlier reported that 80 per cent of the bookings of the Swift was for the diesel variant.
Maruti Suzuki chairman R C Bhargava had said early last week that Maruti Suzuki did not have the capacity to meet the increased demand for diesel cars. Fiat is a natural choice for an engine supplier as It is already selling diesel engines to Maruti Suzuki as well as Tata Motors.
Fiat's Indian operations has seen its sales drop considerably and it was under pressure to improve revenues. This diesel engine deal with Maruti Suzuki will help Fiat to offset the losses caused by reduced car sales.
Maruti's decision to buy diesel engines from Fiat also speaks volumes about its current position in the market. There has been a significant drop in its market share mainly due to low volume of diesel cars. This deal will also provide Maruti Suzuki some buffer time to boost its production capacity. The Indian carmaker will be building a new car plant in Gujarat.
Continue with Google