Car Makers to ramp up diesel engine production in India

The Budget 2012 (Click for more information (The 2012 Budget & the Indian Car Scene : All you need to know)) didn't impose any additional duties on diesel-engined cars. In a month since, car manufacturers have already confirmed fresh investment & expansion of diesel engine production. Petrol prices, already at stratospheric levels, are expected to go up by another Rs. 5 / liter in the coming months. The customer's fascination with diesel cars comes as no surprise; take the case of the Maruti Swift whose bookings saw a 85:15 split in favour of the diesel. The Chevrolet Beat's sales more than doubled, after the introduction of the 3-cylinder diesel option.

• Maruti intends to invest Rs. 1,700 crore on a new diesel engine plant at Gurgaon, Haryana. This facility will be operational by 2013, and running at a 300,000 engine / annum capacity by 2014.
• Hyundai is firming up plans of a Rs. 500 crore plant at Chennai to manufacture diesel engines. Engine sizes will include a 1.1L (i10), 1.4L (i20 and Verna) and 1.6L (Verna). The company also recently announced that it is ramping up production of the diesel i20 & Verna from 7,000 units a month to 10,500. At the moment, Hyundai India imports all of its diesel engines from Korea.
• The Toyota Innova, Etios & Liva see a majority of their sales from diesel-engined variants. The company is awaiting approval from Tokyo to start work on a diesel engine factory in Karnataka State. An announcement is expected soon.
• Honda, a brand that sells only petrol cars in India, and one that has been extremely stubborn in its resistance to diesel cars, is finally biting the bullet! Honda will be rolling out diesel cars in India by year 2014. In fact, the additional investments required for the diesel powerplant facility is one of the areas of disagreement between the partners of Honda SIEL.
• The Fiat 1.3L MJD, long considered as India's National Engine because of the sheer number of cars it powers, continues to add newer models to its portfolio. The Maruti Ertiga is the most recent, while the company is expected to commence supplies to Premier Auto soon for the Rio diesel. If it weren't for the revenues from diesel engines, Fiat would probably find the Indian operations to be unsustainable.

One thing is for certain; whatever growth is possible in the near future, it will only be from diesel cars. Most manufacturers appear to agree.