Premier, famous for the 1960s Fiat-based Indian Padmini taxi, has agreed a deal with Fiat to supply 1.3 litre multi-jet diesel engines for its compact Rio SUV.
Fiat will supply 28,000 engines over the next three years from its plant in Ranjangaon, Economic Times of India reported. The BS IV engine is in final stages of calibration and Premier expects deliveries to start by August-September.
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The engine is also used in the Maruti Suzuki Swift, Ertiga, Fiat Punto and Tata Motors Vista.
Maitreya Doshi of Premier told ET: “With multi-jet coming in, it will boost our sales volumes. [The] market is skewed towards more diesel cars and we were handicapped with non-availability of diesel cars in our top 10 markets. Now with supply expected, we will be ramping up capacity from 300 units a month to 1,000 units by the end of the year.”
With no BS-IV emissions rule complient diesel engine, Premier was only able to sell 2,000 units in the last fiscal year; with this agreement in place, it hopes to sell 8,000 in fiscal 2013 and 25,000 units by fiscal 2015.
The company will still be a niche player in a market where 300,000 to 400,000 units are sold annually.
Premier is also expanding its dealership network to 100 cities from 60, largely in the top 11 cities.
Just 20% of Premier’s business comes from the automotive division today with the rest from the machine tool division. “With volumes of over 8,000 this fiscal year, we should be able to reach a turnover of INR3,500m-INR4,000m from the automotive business which will be almost 50% of our income,” said Doshi.
Premier reached a component supply agreement with Zotye Auto of China to ship 15,000 Rio units in CKD kit form a year for assembly at a plant in Chinchwad.
Doshi said Premier would roll out more models. “We can’t survive with just one product. We are working on some products and we intend to have a portfolio, but it is too early to comment on what they are at this point in time,” he said.
