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FIAT might halt DIESEL engines to MARUTI

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Fiat is considering stopping supply of Multijet Diesel engines to Maruti. This is as per news item in today's Economic Times TV.

Reason is that, as Volkswagen has bought 20% stake in Suzuki, Fiat fears VW might gain access to the world class Multijet Diesels of FIAT as VW is planning to have some cars in Maruti stable re-badged as VW (A Star) and Skoda (Wagon R) and might sell through the respective showrooms.

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As far as I know Suzuki gained the engines from fallout of GM-Fiat partnership. I dont think Fiat can stop it from manufacturing the engine, it can however prevent Suzuki from giving the engine to VW. Also VW has already its own range of engine and Suzuki entered into the venture because if the engine.

Also Fiat, does not supply engines to Suzuki, Suzuki manufactures them.

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Diesels account for nearly 30% sales of total sales.

If Maruti looses this share then surely it a big loss and also might put their numero Uno position at a stake.

An interview with VW India's Marketing head in today's ET TV said that VW has world-class diesel technology to power Maruti cars in India.

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As far as I know Suzuki gained the engines from fallout of GM-Fiat partnership. I dont think Fiat can stop it from manufacturing the engine

The news is wrong.

Maruti Manifactures Multijet engines with a direct tie-up (under licence) with Fiat and GM has no say in Fiat. And Fiat will have every right to terminate the agreement.

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Maruti has invested heavily in a diesel engine plant for the 1.3 Multijet; may other forms of the engine it can't use but the 1.3 Multijet is here to stay. Even if Fiat pulls the plug VW has enough diesel tech to keep Maruti going. But localisation will be another problem which may be time consuming.

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Maruti has invested heavily in a diesel engine plant for the 1.3 Multijet; may other forms of the engine it can't use but the 1.3 Multijet is here to stay. Even if Fiat pulls the plug VW has enough diesel tech to keep Maruti going. But localisation will be another problem which may be time consuming.

There must have been a MOU and that must have been agreed upon and signed by all the parties concerned. There are several clauses and sub-clauses therein including disputes if any and how they are to be settled, either through arbitration or as a last resort through law suits.

So Fiat arbitrarily pulling the plug is unthinkable.They will land up paying huge damages. As a damage control measure, Suzuki and VW can also decide not to badge the 1.3 MJD fitted Suzuki cars as VW.

And there are there four multi nationals involved GM,VW, Fiat and Suzuki.They are adept in negotiations and settlement of disputes.

GM had a stake in Suzuki since many years. Fiat was passing through bad times about 6-7 years ago and thats when GM was in excellent health. GM bought a stake in Fiat to resurrect it and thats how these engines came here in the Swift and other Suzuki cars.In fact the best selling Punto emerged after 2004 and saved Fiat from sinking.The Punto is credited to have altered Fiat's balance sheets.

anjan_c20072010-10-02 18:32:05

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As far as I understand, Maruti-Suzuki bought the technology on a one-time basis.

They and FIAT are not under any obligation to share any further developments, etc. and vice versa. So the deal is a closed chapter.

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That's really a Shocking News for MSIL & might pose a Serious setback to them too.

Even most of the Maruti Suzuki rivals Dealership staff officials are already spreading the Rumors to their clients that Swift now isn't coming with Fiat 1.3l MjD engine ! & are making customer fools..

 

But if this happens then it might be Advantage TATA.

 

I'm doubtful that Fiat might work with TATA for too long, as the Main Debatable Issue i.e: their After Sales Service, is fledging & isn't that's much Improved yet.
Even their JV isn't proving that much Beneficial for Fiat as they expected before that agreement, as per Fiat's Rajeev Kapoor said few Weeks back.

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He informed that Fiat is not supplying diesel engines to MS' date=' only the technology is given & MS manufacturers on their own with a Royalty to Fiat. <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

There will not any technology upgrade for these engines.

[/quote']

 

I don't agree with this, considering the fact that its not the Maruti Suzuki, India who is only using Fiat's 1.3 MjD engine, Instead Suzuki is using this Engine Globally for their Swift, Ritz & also their 1.6l MjD for SX4 too, under their DDiS brand-tag.. 

Regarding upgradations, Recently Suzuki in Europe have tweaked this engine further to make it more Refined, Cleaner & Euro-V compliant for their All New 2010/2011 Swift version.

 

So, Halting MjDs usage for Suzuki globally will prove to be a Serious Issue for them & to Switch over to VW engines, will definitely prove to be a very costly job, which will Include the changes required for their Production lines, their Cars & even their Genuine Spare Parts shops.

Indeed a Giant Challenge ahead for Suzuki, if this News is Actually true..
dr_nishu2010-10-04 19:37:45

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I think based on NAREN64's post and also my understanding (my earlier post) MS have the technology which they bought on a one off basis and have to just pay the license fee to continue making the engines.

In any case, as per terms of the deal, they do not have access to further developments from FIAT (nor do FIAT have to what they do).

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The last i heard Fiat has a separate arm called "fiat powertrain" something.. Apparently this is not connected with the car business and is totally seperate. Fiat supplies its diesel from this place. Don't know how true this is, because once a viewer had asked sorabjee about FIAT terminating its supply of diesel engines to Maruti to which he said that Fiat engines is a separate business. vr.462010-10-05 17:44:53

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Multi Jet DDiS 1248cc (common rail engine  with fixed geometry turbo) was developed jointly by FIAT,GM & Suzuki. Suzuki india is manufacturing it at manesar plant with license fee paid per engine basis. I doubt about authenticity of the topicsmiley21.gif 

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