Hyundai Motor mulling diesel engine plant in India

Our Corporate Bureau
18 October 2005

New Delhi: Hyundai Motor Co., South Korea''s largest automaker, said it may produce diesel engines in India for locally assembled cars. Hyundai Motor, has US$500mn of investments earmarked until 2008 for raising its share of India''s vehicle market to 25 percent by 2010.

Four of the seven types of cars and sports-utility vehicles sold by Hyundai Motor in India are run by diesel engines imported from South Korea. The 1.1-liter Santro and 1.3-liter Getz compete with Tata Motors Ltd.''s diesel-engine Indica hatchback.

Tata Motors is the nation''s biggest maker of diesel-powered cars with 80 percent of Indica and Indigo sedans having diesel engines.

Hyundai Motor may make diesel engines with 1.1 litre and 1.3 litre capacities in India, both used on minicars and compact vehicles, S.S. Yang, the carmaker''s managing director for India said.

Maruti, the largest carmaker in India and 54 percent owned by Japan''s Suzuki Motor Corp., will make 1.3-litre diesel engines for exports. Half of the engines, made with technology from Fiat SpA and General Motors Corp.''s Adam Opel AG, will be exported to Asian and European Union countries, the carmaker said.

Mumbai-based Tata Motors last week introduced a turbo- charged version of its diesel engine in the 1.4-litre Indica hatchback. Ford Motor Co., the second-biggest U.S. automaker, has said it will offer customers a diesel engine when its Fiesta car goes on sale next month.