Premier to source multi-jet diesel engine for 'Rio' from Fiat

Premier Ltd (formerly Premier Automobiles Ltd) and Fiat India Automobiles Ltd have signed a three-year agreement for supply of Fiat's 1.3 litre multi-jet diesel engine to be used in Premier's compact SUV Rio.

Fiat will initially supply 28,000 engines to Premier during the agreement period. According to Premier, the volume may rise further with increase in demand for Rio.

''The engine will be built at Fiat's Ranjangaon plant and supplied to Premier's factory at Chinchwad, Pune, about 60 km away, enabling daily 'just-in-time' deliveries,'' Premier said in a release.

This is the same engine used by several Indian car makers including Maruti and would help enhance supply, service, maintenance and spare parts availability for Premier Rio across the country, Premier said.

Currently, most of the Premier Rio supply is to Tier II and Tier III cities, although there is a strong demand for the vehicle in the metros. With this engine, the Premier Rio will be BS IV compliant, thereby expanding its diesel offering to 14 cities including Mumbai, Delhi, Bangalore, Ahmedabad, Pune etc.

The company plans to aggressively ramp up sales and volumes in the major vehicle markets.