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Old 17th April 2012, 10:40   #1
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Default Car Makers to ramp up diesel engine production in India

Car Makers to ramp up diesel engine production in India-diesel-engine-factory.jpg

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.
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Old 17th April 2012, 11:04   #2
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Default Re: Car Makers to ramp up diesel engine production in India

This comes as no surprise at all. The sheer math as well as technological advancements in diesels has led to the demise of petrol as a choice of fuels. With more manufacturing of diesel engines in the country, pricing differentials between diesels w.r.t. petrols will hopefully reduce, further causing the sales charts to markedly differ.

Even with an increase in diesel pricing by 5-10 Rs / liter, I would for one still prefer the oil - current city driving as well as highways better suit current crop of these cars.
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Old 17th April 2012, 11:14   #3
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Default Re: Car Makers to ramp up diesel engine production in India

That is a nice move as capacities are required aplenty due to switch towards diesel as the preference. But Maruti was also found wanting in enhancing diesel engine production capacity and had to source from Fiat to meet demand.
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Old 17th April 2012, 11:17   #4
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Default Re: Car Makers to ramp up diesel engine production in India

Good thread!
And to add to the point, the price difference between petrol and diesel so substantial that, even newer petrol engines like the 1.0 Ecoboost (Ford) or the 1.4TSI (VAG), may not bring much improvement to the sales of petrol powered cars.
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Old 17th April 2012, 11:48   #5
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Default Re: Car Makers to ramp up diesel engine production in India

Price difference and the FE is the key. The budget didnt impose any duty given the share of Diesel passenger cars is minuscule in comparison with Commercial Diesel vehicles.
What a contrasting state of affairs at Honda and Fiat
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Old 17th April 2012, 11:58   #6
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Default Re: Car Makers to ramp up diesel engine production in India

The diesel and petrol cost difference is the major point driving everyone to move towards a diesel engine car. Current Govt is trying very hard to prevent a Rs. 5 hike in petrol which when happens would eventually nail petrol cars.

I have been driving diesel car since I started driving and when I used to tell people I drive a diesel they used to look at me . But now I drive Vento TDi I have a big smile at my face.

The only thing I find missing in diesel is high revving engine. Current ones goes till 4.5K rpm case in Vento TDi. If they make it somewhere near to 6K rpm, they will have a winner in their hands.

Waiting for Fiat to come with its 1.6L Multijet and Honda with its Earth Series diesel engines, which would eventually turn the game. Good to see companies are investing in India in diesel engine manufacturing.
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Old 17th April 2012, 12:04   #7
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Default Re: Car Makers to ramp up diesel engine production in India

This was expected to happen sooner or later.I guess Maruthi would be the one who would gain most out of this.
We are not considering Maruthi just because of its waiting period.so once production is ramped up i guess they would be able to deliver diesel cars in couple of months time.
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Old 17th April 2012, 12:14   #8
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Default Re: Car Makers to ramp up diesel engine production in India

India’s rising obsession with diesel worries govt
Hindustan Times, 12 Hours Ago

Link to article today's HT article : India

The growing preference for diesel by car buyers and industrial users over petrol and furnace oil has the government worried. The reason: the yawning gap between the prices of diesel and petrol has prompted a clear shift towards the former. A senior official in the Prime Minister’s Office told Hindustan Times: “High consumption of diesel is posing a serious threat to the environment and is encouraging a shift from other costlier fuels to diesel.”

The growing “dieselisation” is also bloating government’s subsidy bill. For every litre of diesel sold at Rs. 40.91 a litre (in Delhi), the government and oil companies foot Rs. 14. Rising diesel consumption, which now stands at 175 million litres a day, translates into a daily subsidy of Rs. 245-crore to keep retail prices at current levels.The Reserve Bank of India has also advocated deregulation of diesel prices to reduce the stress on the fiscal system. This year, diesel consumption is set to grow by over 7% compared to a 4% growth in petrol. Petrol, whose daily consumption stands at about 57 million litres a day in India, is sold at R65.64 a litre, implying it is 60% cheaper to tank up a diesel car. This is highlighted by sales figures. Diesel car sales in India grew by over 25% in 2011-12 at the cost of their petrol counterparts — which fell by 11% during the same period. This has fuelled a diesel bias among carmakers as well. The country’s largest carmaker, Maruti Suzuki, for instance, is expanding its diesel engine capacity by 65% this year from 2.4 lakh units to 4 lakh units. “Last year the demand for diesel cars skewed the overall growth of the industry and posed a lot of challenges for us,” said Mayank Pareekh, managing executive officer, Maruti Suzuki India. “This year we are expanding our capacity substantially as we believe diesel cars will continue to do well.” Likewise, Hyundai is also planning to set up a diesel engine plant this year.
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Old 17th April 2012, 12:15   #9
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Default Re: Car Makers to ramp up diesel engine production in India

This was always on the cards. The Budget has just nailed down the manufacturer's diesel car plans in India. Good to see Hyundai having plans to launch diesel engines in different configurations to suit all their cars. Honda's diesel engined cars will be most awaited. Only wonder if 2014 launch will be too late.

I hope with manufacturers ramping up production, lead times for diesel cars will come down to acceptable levels.

I drive a diesel and petrol car and the diesel is preferred for obvious reasons. While driving a petrol, I always have seem to have one eye on the fuel guage and MID's FE readout.
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Old 17th April 2012, 12:28   #10
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Default Re: Car Makers to ramp up diesel engine production in India

Note from Mod: There are several spelling & grammatical errors in your posts. This negatively affects the board experience for other readers.

Kindly ensure that you proof-read your posts prior to submission. Also, it would be a good idea to use spell-checkers.

Last edited by GTO : 17th April 2012 at 15:45.
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Old 17th April 2012, 12:31   #11
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Default Re: Car Makers to ramp up diesel engine production in India

It would be interesting to see the prices of diesel cars once the engines are produced locally. Where would petrol cars go? Museums would be full soon!
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Old 17th April 2012, 12:33   #12
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Default Re: Car Makers to ramp up diesel engine production in India

Will Honda have to use the diesels they produce in India? Are they not planning about importing some in the short term. 2014 is far.

They also have diesels on some cars already abroad.
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Old 17th April 2012, 12:33   #13
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Default Re: Car Makers to ramp up diesel engine production in India

Diesel consumption by private cars is no where close to the commercial vehicles probably the reason why no additional tax was implemented this time.

Diesel cars have been gaining popularity for quite some time now and companies have seen the +impact of adding a diesel car to their portfolio and this would continue. Some new diesel cars at the entry level probably with the 3 pot engines would surely spice up the competition.

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Old 17th April 2012, 12:39   #14
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Default Re: Car Makers to ramp up diesel engine production in India

This is on expected lines. The news also makes me wonder, the government with its hugely discriminatory pricing for both fuels is slowly but surely killing off the petrol engine market. Will we ever see a time when the price difference between Petrol and diesel is very narrow? Not in our lifetime I guess.. :-(
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Old 17th April 2012, 12:49   #15
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Default Re: Car Makers to ramp up diesel engine production in India

So what is the future of petrol engines?? Will they be confined to two wheelers only? I wouldn't be surprised if car manufacturers stop making petrol engines in the near future!! Would this also mean that petrol as a fuel will be no longer available at all fuel stations and come with a 'exclusive' tag?? may be?
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