Tata Motors, which is one of the leading car makers in the Indian market, has got a 50% stake in Fiat. The company has given its consent towards helping Maruti Suzuki get off its troubles to a great extent. Fiat India is expected to start working on this order with immediate effect starting from the 2nd of January and is expected to finish up the job within two weeks, so that it can dispatch the order by the second week of January itself.
Since the time Maruti Suzuki faced labor unrest at its Manesar plant, the premium Indian auto maker has been finding it very difficult to timely deliver diesel variants of the flagship cars of the company including Maruti SX4, Maruti Swift, the Swift Dzire and the Maruti Ritz. Fiat, the car maker from Italy, is widely known for its expertise in sourcing its diesel engines. It has been sourcing a lot of Multi-jet engines to a lot of global car makers worldwide. At India, Fiat had got a huge facility at a place called Ranjangaon, located near Pune. This unit has a capacity of rolling out 300,000 petrol and diesel engine units combined in a year. Hence, when Maruti India was facing the crisis, it decided to make use of the expertise that Fiat has in technology pertaining to diesel engines. This was done with the aim of meeting the huge pressure that the company is facing for making timely delivery of these diesel variants.
The labor strikes that Maruti Suzuki faced recently stretched for around three months from August to October. This has seriously affected the production levels of this largest car maker from India and the company is yet to recover itself fully from the damage it suffered. Suzuki Powertrain Ltd. has been the only source that Maruti Suzuki has for its diesel engines. Although its manufacturing plant is now undertaking production at full pace, the company is still not in a position to meet its deadlines. Fiat has come offered to help Maruti with its diesel engines after Volkswagen did not offer the company the assistance that it was hoping to get. However, with the agreement with Fiat on, Maruti is now having a legal alternative that enables them to source up to 1 lakh units of diesel engines in a year.