Hyundai's plans come months after the Korean company had put on hold a decision on the diesel plant as it awaited clarity from the government over the treatment of diesel vehicles. The company feared that a special additional tax on diesel vehicles could slow down the buoyancy in demand for them and would not justify new investments.
"With the budget throwing clarity on the matter, the plans for diesel engine factory are on again and an announcement can be expected over the next month or so," sources said. The company is looking at having a minimum capacity of 1.5 lakh units for the plant and the engine configurations being considered are 1.1-litre, 1.4-litre and 1.6-litre.
This would mean that not only will the requirement of the bigger cars be met, but possibly even a popular compact like i10 can see a diesel variant.
Companies like Maruti Suzuki, General Motors and Ford are already ramping up diesel cars production as the market moves sharply towards the fuel that not only offers a huge price incentive over petrol but also higher fuel efficiency. Sources said Hyundai's diesel engine plant is likely to come up at the company's existing factory premises near Chennai, though other options are also being looked at, including in Gujarat.Automobile News
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