Maruti Suzuki India, the largest car manufacturer in India has extended its diesel engine sourcing deal with the Italian automaker Fiat till the year 2018. The existing agreement was due to expire in the year 2015.
The move by the carmaker has been taken in light of the demand for diesel powered passenger cars in India. Maruti Suzuki sources the 1.3-liter Multijet diesel engine from Fiat which powers the likes of the Swift, the Swift DZire and the A-Star.
As per the current agreement, Maruti Suzuki has been sourcing 1,00,000 diesel engines annually from Fiat and 2,00,000 engines have been delivered so far. In addition to the engine sourcing, Maruti Suzuki also manufactures the diesel engine at its production facility at Gurgaon as part of the licensing agreement with Fiat.
According to industry experts, diesel cars continue to hold a strong demand in the Indian auto market due to the price differential between petrol and diesel as well as the higher efficiency offered by diesel engines in comparison to petrol engines.
