Maruti to source diesel engines from Fiat

Car market leader Maruti Suzuki India today said it will source diesel engines from Fiat to meets its domestic requirement as it has decided not to make further big investments in powertrains in the absence of a fuel pricing policy.

"Currently, we are exploring the possibility of sourcing diesel engines from somebody else, because making a big investment in expanding our own engine capacity is not prudent in this situation," Maruti Suzuki India Chairman R C Bhargava told reporters here on the sidelines of an IIFT event here.

Asked specifically to confirm reports that MSI is sourcing diesel engines from Fiat, he replied in the affirmative.

"Currently, we are in the process of homologation (of the diesel engine from Fiat)... It could take anywhere between two to three months...," Bhargava said.

He, however, did not provide details of the diesel engines that MSI is looking to source from Fiat. At present, MSI manufactures and uses a 1.3-litre diesel engine for its Swift, DZiRE, Ritz and SX4 models under a licence from the Italian auto-maker.

Bhargava said due to the huge price difference between petrol and diesel, the demand for diesel variants of models like SX4 and DZiRE has "suddenly shot up much more than what was forecast".Last week, Bhargava had ruled out making further substantial investments on expanding engine production in the absence of a clear roadmap on how the diesel prices would be in future.

He had said MSI has been unable to decide on whether to invest on increasing diesel engine capacity or that of petrol engines.

"We have a big problem in terms of absence of fuel (pricing) policy... While the demand for diesel has increased in the recent past due to the increased petrol price, I am not sure how long will this stay like that," he had said.

Bhargava, however, said MSI is looking to enhance output at its existing facility at Manesar wherever possible.

The company's diesel engine plant at Manesar currently produces 2.8 lakh engines per annum.

Earlier this month, MSI had stated that it was drastically reducing exports of diesel engines to Hungary to cater to domestic demand.

It exports about 35,000 to 45,000 units every year to Hungary, but is looking to reduce it to almost negligible levels in the next six months.