Hyundai finally about to reveal its plan for diesel plant in India

The South Korean auto maker Hyundai Motor Co. has finally opened up regarding its plans for a diesel engine plant in India. According to the company's Director of Marketing, Mr. Arvind Saxena, Hyundai was dicey about the diesel engine plant and was awaiting the government's decision about the anticipated higher tax on diesel. Recently, a senior executive of Hyundai India has revealed that, in about two weeks, the company would be announcing its plans on building its first diesel engine plant in India that would help the company cope with the increasing demand of diesel cars in India.

Mr. Saxena, however remained tight-lipped regarding the investment and location of the diesel engine factory. Hyundai Verna sedan and i20 hatchback have been facing huge waiting period for their diesel variants and the company is also planning on sourcing more diesel engines from South Korea to meet this demand till the engine factory does not get into function. It was also revealed that the company would boost up the imports of diesel engines from South Korea to 10,500 from 7,000.

Hyundai India produces Hyundai Eon, Santro, i10 and i20 hatchback cars and Verna, Sonata, and Accent sedans at its factory in Chennai; this factory has a capacity of producing 600,000 gasoline engines every year. Mr. Saxena also mentioned that the company wishes to increase the sales by 10% from last year and sell at least 410,000 vehicles in India by 2012. The company could manage growth of only 5% in the year 2011.

In our country, the government subsidizes diesel due to which the price of diesel is 38% less than petrol price, this in turn has hiked up the demand of diesel cars / SUVs and ultimately increasing the fuel subsidy burden on the government. Owing to this burden, government was expected to impose higher tax on diesel but gladly no such decision was taken by the government and now major car makers of the country including Maruti Suzuki India are moving ahead with their big plans for diesel engine cars.