Economic Times reported that passenger car market leader Maruti Suzuki India Ltd on Tuesday announced merger of a diesel engine manufacturing company with itself and said it would focus on the diesel car segment to meet growing demand.

Mr Shinzo Nakanishi managing director and chief executive officer, said after the company's top management at its board meeting approved the merger of Suzuki Powertrain India Ltd with Maruti Suzuki. He said that "We will take diesel engine capacity to six lakh from the current three lakh by mid-2013. The merge will provide cost reduction and allow production planning under a single management.”

The company is currently using only 70% of its daily petrol engine manufacturing capacity, as petrol powered car sales have been severely hit.

Mr Nakanishi added that "The gap between petrol and diesel has increased significantly. The diesel car penetration in the market went up to 47% last year. In May our diesel cars penetration got up to 55%."

SPIL is a subsidiary of Suzuki Motor Corporation, Japan. The company supplies diesel engines and transmission systems to Maruti Suzuki which also holds 30% stake in the firm.

The company which has 2,592 employees made a net profit of INR 115 crore last year with a turnover of INR 4,550 crore. Maruti Suzuki said the addition of a profit making entity will help its books.

Source - Economic Times

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