Tuesday, 22 November 2011

Fiat, Padmini close to signing pact to source 1.3 litre multijet diesel engine for Rio

Fiat and Padmini group are back again for a patch-up, all thanks to the growing Sales of the Indian market and huge demand of the Diesel Engines. The car makers across India are catching up with the Diesel Sales in India and thus Fiat, the supplier of Diesel Engines is gaining on engines front if not on the Sales of its own cars.

The Carmaker also supplies Diesel engine to Maruti Suzuki India Limited. The carmaker has now signed a deal with Padmini group for 1.3 Liter engine for Premier Rio Compact SUV. 

The two groups Fiat and Padmini group have again patched up after fifteen years when they broke up.  Having re-entered the passenger vehicle space withRio in 2009, Premier plans to source 6,000 to 8,000 engine units from Fiat, which conform to Bharat Stage IV emission standards and caters to top 13 cities, including Mumbai, Delhi, Chennai, Kolkata, Bangalore.

"We have been in talks with Fiat for quite some time. There are a couple of vehicles in Italy right now which are being tested; once the technical integration is ready, we will enter into a component supply agreement with Fiat," Chairman and Managing Director of Premier, Maitreya Doshi, told ET. And for Fiat, which has been struggling to post decent sales numbers of its own cars, any sourcing business will help reduce losses. Rajeev Kapoor, MD, Fiat India, said: "Yes we are in talks.

Premier may be marginal player, but the company still has a land bank of 218 acres at Kalyan, in the outskirts of Mumbai, which it plans to monetise soon and it may use the proceeds to expand the automotive division. Established in 1944, Premier (formerly known as Premier Automobiles) went on to become one of the pioneers of automobile manufacturing in India.

Being a leading player for decades, Premier Auto had got into a tie-up with Peugeot and Fiat, post liberalisation, but both the ventures were fraught with legal hassles and labour issues which pushed the company into losses. The company made a comeback of sorts into the automotive sector by launching a diesel van and a pick-up in 2004, but it is still an inconsequential player in the fast growing van and pickup market.


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