Suzuki to choose between Fiat-made and indigenous engine to meet BS-VI norms

“Suzuki is developing a new 1.5 litre diesel engine in Japan. Simultaneously Fiat is trying hard to sell its 1.6 litre engine to Maruti as a replacement for the aging 1.3 litre. The 1.6 litre can be detuned to below 1.5 litre thereby qualifying for the tax breaks. Maruti will be deciding which one it should go for in the next few months depending on cost efficiency”, said a source who supplies to Maruti Suzuki.

Maruti did use Fiat’s 1.6 litre engine in the first generation S-Cross, its premium model sold through the Nexa chain. However, poor demand for the crossover forced the company to withdraw this engine option and stick to the cheaper 1.3 litre instead.

Maruti Suzuki has had a licensing pact with Fiat to produce the 1.3 litre since 2007 at its Manesar facility. The Delhi-based company later sourced the same engine from Fiat from the latter’s Ranjangaon plant under an annual supply contract.

Fiat 1.3 litre multi-jet diesel engine

At present cars having a diesel engine of up to 1.5 litre and with length not more than 4 meters, are taxed at 31 percent (28 GST + 3 percent cess). All other diesel cars and SUVs are taxed between 43-50 percent depending on the size of the vehicle and the engine.

Maruti’s upcoming mid-sized sports utility vehicle (SUV) that will rival the Hyundai Creta and Renault Captur will most likely sport one of the two engines. A reply from Maruti Suzuki on a mail sent by Moneycontrol seeking comments stated, “We don’t give guidance on future products and technologies”.

Fiat’s attempt to hard sell its 1.6 litre engine to Indian companies such as Maruti Suzuki, in the light of phasing out the 1.3 litre engine, is seen as a desperate measure by the Italian company to sustain operations in the country. With yearly volumes of less than 2,000 under its own brand, Fiat has become of the most troubled label in the Indian car industry.