Hyndai mulling setting up new diesel engine plant in India

Hyundai Motor is considering setting up a new diesel engine plant in India that will use locally-sourced components to give customers a wider choice according to an IANS report. It would also expectedly consolidate its position as the country's largest exporter of passenger cars.

The report quoted an unnamed senior company official saying that the company concluded a feasibility study on a new diesel engine plant in India around three months ago and a decision on that would be taken soon at the company's global headquarters after due consultations with its executives in India.

The official added it would cost around $550 million to set up a diesel engine plant with an annual capacity of 300,000 units, the report said.

According to analysts the momentum towards a diesel engine plant in India is building up with the company planning to introduce its popular i10 model's diesel variants to take on emerging competition.

The report quoted the official as saying that it would initially look to localising some critical engine components in India and once that was done making other components like cylinder block heads wouild not be a problem.

Hyundai Motor's managing director for its Indian subsidiary Han Woo Park however, did not commit any time frame for the new plant but indicated a diesel version of i10 was being decided, the report said.

According to the company's spokesperson for India operations, the company had so far made no firm plans in this regard, neither had it worked out any figure concerning investment, scale, etc.
The company's Indian plant rolled out 270,000 i10s last year both petrol and diesel put together. The diesel model is however only for the export market as of now and is shipped out of the country with imported engines from South Korea.

The report quoted Arvind Saxena, director for sales and marketing at Hyundai's India operations as saying that Hyundai sold 149,000 i10s in India last year all with petrol engines. He added that while it was true there was a need for a new diesel engine it needed to be developed first.

Saxena said the diesel engine currently being used on cars meant for exports may not be suitable for Indian market. He added the diesel engine would be viable if the demand was around 150,000 to 200,000 units per annum.