Own diesel plant by 2013 second half by Maruti Suzuki

Maruti Suzuki the country’s largest auto maker expected to have India’s first own diesel engine plant. The plant will be ready by the second half of next fiscal with an initial annual capacity of 1.5 lakh engines. According to a report that this will help it meet the sudden increased demand for diesel cars which has arisen because of the cheaper price of diesel versus petrol.

The report quoted that the new engine plant is expected to come up at its Gurgaon facility, Chairman R. C. Bhargava as saying “We are being flexible on the capacity of the plant. We want it to be built on modular lines, so production can be expanded rapidly when needed.” In a meeting on Monday, the company's Board reached an agreement on the need for such a facility and has sought a “detailed project report” by the next Board meeting. A “final go-ahead” will be given after reviewing the Government's policy on diesel cars in the upcoming Budget. The report quoted an official as saying “The Board is in agreement that a new diesel plant is necessary for the company to meet the demand for such cars. However, a few details need to be worked on, such as land availability, investment and the size of the plant.’’

The report mentioned that a new diesel engine plant is expected to entail an investment of about Rs 1,000 crore for a capacity of one lakh engines, company officials had said recently. The proposed plant would be the first diesel plant under the Maruti Suzuki banner. At present, Maruti itself has a plant for only petrol engines, while the diesel engines are supplied by allied company, Suzuki Powertrain India. Suzuki Powertrain has a capacity of 2.9 lakh engines a year, which is now proving inadequate due to the high demand for diesel models (85 per cent of sales where available). At present, the waiting period for the diesel Swift and Dzire models stretches up to four-five months. It can be recalled that as an interim arrangement, Maruti has also tied up with Fiat India for diesel engine supply. Fiat, whose 1.3-litre diesel engine Suzuki Powertrain itself makes under licence, is supplying an additional one lakh engines a year to Maruti for a three-year period.