Premier and Fiat are again going to tie a knot very soon. The two companies are going to sign a commercial agreement with its former partner for the 1.3 litre multijet diesel engine – the one that drives Maruti’s Swift and Tata Motors’ Vista – for its compact sports utility vehicle (SUV) Rio.
Having re-entered the passenger vehicle space with Rio 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. 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.
The engine is under final calibration, once it’s over, it will take another two to three months to be used. Though it is not a big volume, it will definitely offer additional revenues to Fiat India..
Premier has managed to sell just 2,000 Rios since its launch, which is miniscule in the annual SUV market of over 3-4 lakh units. Doshi attributes this to the lack of a BS IV engine which restricted the sale of Rio to Tier-II and Tier-III cities, but with BS IV, it could be a different game altogether.
With the BS4 engine Premier will also introduce the Rio with better NVH (Noise Vibration & Harshness), improved interiors and well-tuned engines.
Premier has entered into a formal component supply agreement with Zotye Auto of China to source 15,000 CKD kits per annum for Rio. These kits are assembled at the company’s plant in Chinchwad, Pune. A facelifted variant is also on the cards.