Suzuki Motor Corp. has agreed to purchase 1.6-liter diesel engines from Fiat Powertrain Technologies in order to fit into a new vehicle to be built in Hungary beginning in 2013. The company has been purchasing 2.0-liter diesel engines from Fiat's powertrain unit since 2006 for the SX4 small SUV, which is assembled in Hungary.
The company also manufactures 1.3-liter diesels in India with the license from Fiat Powertrain. Suzuki and Fiat have industrial partnerships dating back 10 years.
Suzuki builds the Sedici small SUV for Fiat in Hungary. Last May 25, Fiat-Chrysler CEO Sergio Marchionne and Suzuki Chairman Osamu Suzuki met in Turin.
According on two insiders who were briefed on the situation, Mr. Suzuki offered to produce the next-generation Sedici for Fiat. Launched in 2005, the current Sedici will end production in 2013. A replacement of the model, which is a rebadged variant of Europe's bestselling company SUV Suzuki SX4, is not included in Fiat's product plan, which extends until 2014.
Fiat is looking into replacing the Sedici with a company SUV, code-named B-Jeep, which may arrive by 2013 from Chrysler's Jeep unit. However, no decision has been made yet, according to a Fiat source.
Fiat has a deal with Suzuki to buy 20,000 Sedici units annually. In 2007, Sedici sales reached to 31,855 units, but have been steadily declining since then. Last year, it reached 16,505 units, according to JATO Dynamics' data. Sales for the Suzuki SX4 peaked at 50,354 units in 2008 but dropped to 37,517 units in 2010.