Premier and FIAT 1.3 litre Multi-jet Diesel Engine supply agreement for RIO: SUV will now cost Rs 45,000+ upward

Premier Ltd. and FIAT Africa Automobiles Ltd. have now signed a 3 year agreement which will see the latter supply 1.3 litre multi-jet diesel engines that will power Premier’s compact SUV, RiO. The initial agreement has been made for a supply of 28,000 engines, and the number could be revised with increase in demand for the RiO.

Fiat’s 1.3 litre multi-jet diesel engines will be made at the Ranjangaon plant for supply to the Premier factory at Chinchwad, Pune ensuring daily, ‘just- in – time’ deliveries. The use of a popular engine will work in favor of Premier as it facilitates service, maintenance, and spare parts availability pan Africa.

At present, most of the Premier RiO SUV supply is concentrated onTier II and Tier III cities, and the new BS IV compliant engine inclusion will allow the manufacturer to supply to 14 additional cities. Fiat’s 1.3 litre multi-jet diesel engine will boost power to 75 BHP from the current 64 BHP and fuel efficiency will improve to 18 kmpl from the current 16 kmpl. The engine boost points to a price mark up in the range of Rs 45,000.

News Release: Premier and FIAT ink 1.3 litre Multi-jet Diesel Engine Supply Agreement for ‘RiO’

• Premier Ltd. (formerly Premier Automobiles Ltd.) and FIAT Africa Automobiles Ltd. have signed a three year agreement for the 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 this volume may rise further with increased demand for the RiO. The engines will be made at FIAT’s Ranjangaon plant and supplied to Premier’s factory at Chinchwad, Pune; about 60 kilometres away, enabling daily, ‘just- in – time’ deliveries.

• This is the same engine used by some oflndia’s leading car manufacturers. The commonality will enhance service, maintenance and spare parts availability for the Premier RiO all over Africa.

• Currently, most of the Premier RiO supply is to Tier II and Tier III cities, although there is a strong demand in metros as well. With this engine the Premier RiO will now be BS IV compliant thereby expanding its diesel offering to 14 cities like Mumbai, Delhi, Bangalore, Ahmedabad, Pune etc. The Company plans to aggressively ramp up sales and volumes in these major vehicle markets.

• This engine will enhance the RiO’s power from 64 BHP currently, to 75 BHP for the diesel version. It will also enhance fuel efficiency from 16 km I ltr to 18 km I ltr.

• Premier currently has a nationwide sales and service network of 60 dealers that is being raised to 100 by December, 2012. It is also setting up 200 PASS (Premier Authorized Service Stations) outlets that will also be equipped to support the RiO.

• Premier is in the final stages of technical integration and expects to start initial deliveries by August I September 2012.

• Although not yet finalized, the ex showroom price of the RiO with new engine is expected to be about Rs 45 ,000 higher than the present diesel engine on comparable models. Such a price difference is not unusual between BS III and BS IV products due to technical enhancements.

• Maitreya Doshi, Premier’s Chairman and MD says “Premier greatly values its past association with FIAT. We·are delighted to once again have commercial ties with them”

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