| Jan 19, 2012

High demand for Suzuki vehicles in India has prompted the Japanese automaker to boost its engine supply deal with Fiat by 100,000 units a year for the next three years.

The deal between Maruti Suzuki (of which Suzuki owns 54.2 percent) and the Fiat group will see Fiat's 56kW 1.3 litre MultiJet turbodiesel engines exported for use in Suzuki's Indian-market vehicles.

The engines will be built by another Italo-Indian joint venture between Tata and Fiat, at a plant in Maharashtra State.

Curiously, Suzuki's prior diesel engine deal with Fiat was cited by key Suzuki shareholder Volkswagen as a breach of the partnership agreement between the two companies.

Arbitration procedings have been underway between Suzuki and Volkswagen since November 2011, after Suzuki's request for Volkswagen to return its 19.9 percent stake was refused.

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