Many would expect the relationship between Suzuki and Fiat to drift apart after Volkswagen bought a 19.9% stake in the Japanese carmaker. But no, both parties are set to continue their 10-year old cooperation and expand it further. Currently, Suzuki builds the Sedici for Fiat in Hungary (Fiat buys 20,000 units a year) and produces Fiat diesel engines under license in India.

Now, according to two persons in the know, Suzuki Chairman Osamu Suzuki met Fiat CEO Sergio Marchionne and Fiat chairman/controlling shareholder John Elkann in Turin last week. He offered to build the next generation Sedici for the Italians.

A rebadged SX4, the current Sedici was launched in 2005 and production will end in 2013. Fiat’s product plans does not include a replacement for it, but they might want to have one as the Sedici is Europe’s top-selling small SUV. An option is a small SUV planned in 2013 by Chrysler’s Jeep unit (code-named B-Jeep), but no decision has been made yet.

Moving to India, market leading Suzuki has asked Fiat for permission to double its annual production of the 1.3L diesel engine to 400,000 units as demand for diesels grow, although Fiat prefers to built the additional engines for Suzuki itself in an underutilised, 300,000-unit a year engine plant in Ranjangaon, India, which is part of Fiat’s JV with Tata Motors.

This DDiS engine that features in cars like the popular Maruti Swift is a 1,248 cc commonrail turbo unit with 75 PS and 190 Nm of torque. It’s paired only to a five-speed manual ‘box.

At the high level meeting, the bosses also discussed the possibility of Fiat subsidiary Magneti Marelli supplying Suzuki in India with an automated manual transmission system. The gearbox they’re talking about could be the one used in the Proton Savvy AMT.