With the ever increasing petrol prices and the ongoing dieselification of the Indian car market, car sales for the cheaper fuel have risen considerably. Hyundai has been mulling over a diesel plant for sometime now.
The Korean car maker is planning to set up a diesel engine manufacturing plant in India with a possibility of investment of Rs 400 Cr.
- Hyundai Motors India Ltd. Under its head HanWooPark announced investing a sum of Rs 400 Cr for the diesel engine plant in 2010 which was kept on a hold because of fall in the market. According to sources, HMIL has decided to revisit the plan after seeing the top management in March 2012 with a new viability.
- The erstwhile Head HanWoo Park was replaced by Bo Shin Seo as Managing Director. He returned toKorea as the Chief Financial Officer of Kia Motors, which is a division of Hyundai Motor Co.
- – The plan declared by Park was supposed to have the annual capacity of 1.5 lakh units for the three types of engine i.e. 1.1 liter ,1.4 liter and 1.6 liter.
- -“We have to weigh the pros and cons as there has been no mention of diesel tax in the Budget. Within two weeks we will be taking a decision on whether we should go ahead with our diesel plant or not” a spokesperson for HMIL had said
- HMIL had put a hold on the diesel engine plant plan due to slow down in market in November last year. It was predicted that HMIL will go ahead with the plant plan. But after the budget this year in March the company plans to evaluate the setting up of the diesel engine plant again.
- – Currently ,HMIL is importing diesel engines from Korea for its models i20 and Verna . The company has a capacity to produce 6.7 lakh vehicles per year. The company says that it has increased the production of diesel engines for its cars by up to 50 per cent.
- Hyundai also said that the supply of both the diesel cars taken together will go up almost 50 per cent from the existing 7,000 units per month to 10,500 units per month.
HMIL’s demand for diesel cars have gone higher due to a hike in petrol prices inIndia. The sales went up by 2.8 per cent at 32,010 units from 31,123 in the year ago.In the yr 2011 ,the company’s sales increased by 16,992 units from 3,56,717 to 3,73,709 units setting up a growth of 4.76 per cent in previous year.
Source: Financial Express