Fiat Powertrain Technologies and DaimlerChrysler announced on Tuesday that they had struck a strategic agreement for Fiat to supply engines for trucks produced by a subsidiary of the German company.
Fiat will supply light-duty diesel engines to Mitsubishi Fuso Bus & Truck Company for use in its Canter light commercial vehicle, a joint statement said.
The Canter will be marketed on all major markets, including Europe and Japan.
The agreement calls for Fiat to initially supply some 80,000 F1C 3000cc engines a year starting in 2009. The volume is expected to increase in the following years, the statement added.
"Within the framework of this strategic supply agreement the two companies are also investigating further potential business opportunities in other markets, including southeast Asia," the statement said.
"Our ability to partner with DaimlerChrysler is confirmation that the decision to carve out our powertrain activities as a separate sector two years ago was the right one, and that we have products and technical skills to satisfy the needs of a demanding market," Fiat CEO executive, Sergio Marchionne, said.
Marchionne announced last week that the Turin automaker hoped to strike a new agreement with an international partner before the end of the month.
"Since ending our partnership with General Motors in 2005, we have struck 13 international agreements and we hope to sign two more before the end of the year, one perhaps by the end of the month," Marchionne said.
The F1C is a common rail engine which produces 177 horsepower at 3,500RPM.
It us currently being produced in Foggia but it will soon be produced in another location to meet the demand from the new accord.
Fiat shares immediately shot up 1.16% after the accord with DaimlerChrysler was announced.
