Hyundai eyes opening diesel engine plant in India

The South Korean auto giant, Hyundai too has entered the race of putting up a diesel engine plant in India to meet the rising demand of diesel cars in the Indian car market. The credit goes to the Finance Minister Pranab Mukherjee, who thankfully, did not impose any additional tax on the diesel in the Union Budget 2012-13. Presently the diesel engines powering the cars like Hyundai i20 hatchback and the Hyundai Verna sedan are being imported and the company is now looking forward to manufacturing diesel engines on its own. The company is likely to announce an investment of Rs. 500 crore in the engine facility.

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Owing to the upward graph of the demand of diesel vehiclesHyundai had planned the diesel plant in past which until few days back was awaiting the government’s final take on the much speculated and feared diesel tax. The company was apprehensive about the possible reaction of the industry and the customers on the diesel tax and thought of holding the line on the investment in the diesel plant. According to the sources, since the budget spared diesel an extra tax, the plans of a diesel engine plant in India is again on for the company. The engine plant is expected to manufacture 1.1-liter, 1.4-liter and 1.6-liter engines, the plant is also expected to have a minimum capacity of 1.5 lakh units. The company would make official announcements in a month or so.

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The sources also suggest that with the in-house production of diesel engines the company would not only successfully cater to the needs of the bigger car segment but could also equip compact cars like i10 hatchback with a diesel engine. This diesel engine plant would most likely be put up at Hyundai India’s existing factory near Chennai, however, other locations including Gujarat are also being considered. There are other companies in India like Maruti Suzuki, General Motors and Ford Motors that are strengthening diesel cars production, this situation is the result of the fuel’s competitive pricing and attractive efficiency.

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