TOKYO -- Japanese compact car maker Suzuki Motor Corp. said on Thursday it has agreed with Italy's Fiat S.p.A. to study a licence deal on diesel engine production.
If a deal is struck, Suzuki would produce 100,000 diesel engines a year in Asia using Fiat's technology starting in 2010, a Suzuki spokesman said.
The Japanese company does not currently produce diesel engines.
Suzuki, which is held one-fifth by General Motors, is also exploring the possibility of using Fiat's injection system as part of an effort to strengthen their strategic partnership, the company said in a statement.
Fiat, which makes cars such as the tiny Cinquecento, saw a record loss in 2002 due to slumping sales, triggering a tough restructuring to refocus on its core automotive business.