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Hyundai puts diesel engine plant on hold

By Motortrend India Staff   |   09 November,2011

India’s second largest car maker Hyundai Motor India on Wednesday said it has put on hold its Rs 400 crore diesel engine plant, which would have an installed capacity of 1.5 lakh unit per annum, due to sluggish demand.

“Given the fact that the market is not buoyant at the moment, our diesel engine plant plans are on hold at the moment,” a Hyundai Motor India Ltd (HMIL) spokesperson told PTI. The company will hold its plans for a “medium term”, he added.

“Having invested USD 2 billion in India (so far), we can only move forward and stay committed to this market,” the spokesperson said.

HMIL’s domestic sales in October fell 4.95 per cent to 33,001 units from 34,720 units in the same month last year. Exports also dipped by 12.42 per cent to 15,324 units during the month from 17,497 units in the year-ago month.

In December 2010, HMIL Managing Director and CEO Han Woo Park had said the company would invest Rs 400 crore over three years to set up a diesel engine manufacturing plant with an installed capacity of 1.5 lakh unit per annum.

“The feasibility study for the diesel engine plant has been completed and we will announce the location in the next few months. The plant is proposed to have an annual installed capacity of 1.5 lakh units,” he had said.

The plant would have manufactured three different engines of 1.1 litre, 1.4 litre and 1.6 litre capacities only for the domestic market. The company had planned to utilise the engine from the new plant in its new models and only a few would be used for replacing the existing models.

The company at presents imports its diesel engines from Korea for its models such as ‘i20’ and ‘Verna’. Hyundai Motor has an installed capacity to produce 6.7 lakh vehicles per annum.

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