[SmartCat]

Same news, different manufacturer, bigger numbers!

Maruti shifts gear to set up Rs 1,700-cr diesel engine plant in Gurgaon

In the first phase, we will invest Rs 950 crore. After that, we will double the manufacturing capacity to produce 300,000 units per year by 2014. This will entail a total investment of Rs 1,700 crore,” said R C Bhargava, chairman, MSIL.
With the Finance Minister allaying fears of imposition of an additional tax on diesel vehicles in the Union Budget tabled last week, automobile manufacturers have begun to pull out all stops on their proposed investments in diesel engine facilities.

[MAS]

Hyundai has officially stalled plans to set up the Diesel Plant in India.

Source : Hyundai officially stalls plans to set up diesel engine plant in India | CarTrade.com

At this juncture, where the demand for diesel powered cars have witnessed a sudden boost, the country’s second largest auto giant, Hyundai Motor India Limited (HMIL) has officially announced to halt its plans for establishment of a diesel engine plant in the country. Since the year 2009, the company was targeting to set up this diesel engine plant but the market conditions rendered it unfeasible.

The main determinant for stalling the plan has been mentioned as the lack of clarification from the Indian government with regards to its fuel pricing policy.

Mr. Bo Shin Seo, Managing Director, HMIL, was quoted as saying, “We have no decision on the diesel plant from the head office and continue to watch the government policy closely. To meet the high demand, we have increased the supply from Korea and can continue to do so further.”

Since the demand for the diesel variants of Hyundai i20 hatchback and Hyundai Verna sedan have surged substantially owing to mounting petrol costs, the automaker is increasing diesel engine imports from Korea to cater this demand. In a bid to utilise its existing plant capacity of 5.5 lakh units of petrol engines at Chennai, the company has augmented exports of petrol models of its bestselling hatchbacks, i10 and Eon.

Hyundai capitalises a high share of exports ranging about 40 to 50 percent on its total production. So this high diesel engine import cost is compensated with the revenues generated from the high exports.

Does this means i10 diesel will not see the light of the day for a longer period of time?

[sarthakgupta]

Hyundai to invest Rs. 1600 Crore to build a diesel engine plant at its Sriperumbudur facilities in India.

Hyundai Motor's India already has two car plants with a total capacity to produce around 630,000 units per annum. The company is all set to sign a memorandum of understanding (MoU) with the Tamil Nadu government on November 5 and share details plans of the future projects for the Indian market, it said in a statement.

Hyundai Motor India MD Bo Shin Seo said "The investment will help us meet the growing demand of diesel vehicles in India and reduce the waiting period on our popular models." The company said the new investment would create direct employment opportunity for 500 persons and help Hyundai to offer its customers more diesel options across segments.

So this confirms i10 1.1 diesel in India. Brio diesel's competition is getting ready even before its launch.

[suhaas307]

They should ideally do what Chevrolet has done to their Talegaon plant. Set up a line that will manufacture both diesel and petrol cars. This will add tremendous flexibility and allow them to interchange manufacturing diesel / petrol cars as and when required given the fact that demand can fluctuate.

[volkman10]

Hyundai India’s new diesel engine plant to be opened shortly; Will cater to 2014 i10 diesel and upcoming mini SUV.

http://indianautosblog.com/2013/07/h...ne-plant-85913

[JayPrashanth]

Link to News Section

On one end of the spectrum, the country's largest car maker Maruti Suzuki is cutting back on diesel engine production owing to dropping demand. On the other hand, the country's second largest car maker Hyundai is betting big on diesel power.



This seemingly contradictory approaches may be reconciled by the fact that while Maruti Suzuki produces diesel engines in-house and outsources some production to Fiat India, Hyundai imports all its turbo diesel engines from South Korea. So, while Maruti needs to cut back on diesel engine production to adjust inventory levels, Hyundai plans to tide over the tough sales climate and save money by producing diesel engines in India.

Hyundai offers four turbo diesel engined cars in India: the i20, Verna, Elantra and Santa Fe. The imported turbo diesel engines that power the cars cost Hyundai quite a bit in terms of import duty. Spare/replacement parts for these engines are also expensive, given their imported nature. In this light, the upcoming diesel engine factory at Hyundai's Sriperumbudur manufacturing facility, off Chennai, could be instrumental in helping the car maker achieve cost savings on diesel car models.

Amid growing competition, Hyundai India could also use the cost efficiencies achieved through the diesel engine factory in order to rationalize car prices, making for more competitively priced products. According to the FinancialExpress, the diesel engine factory that Hyundai is setting up at an investment of 300 million US Dollars is all set to go on stream very soon.

Hyundai India's diesel engine factory is a flexible plant, which means that it can produce both diesel and petrol engines, aligned to market demands. This approach hedges Hyundai's bets as any change in car buyer behavior can be met swiftly and flexibly. Here's a round up of advantages,

• Cost savings on account of no import duty
  
• Lower spare/replacement parts cost for diesel engines
  
• Lower transport and logistics costs
  
• Lower waiting periods
  
• Flexibility of catering to both petrol and diesel car demand

Hyundai's upcoming small car, code-named the BA hatchback, will be available with both petrol and diesel engines. The car will sit between the i10 and i20 car models. So, the 2014 Hyundai BA, which could be called the i15, will be the least priced diesel engined car in Hyundai's Indian line up. The hatchback will use a 1.1 liter-3 cylinder CRDI turbo diesel engine. An August 2013 launch time frame in India, is doing the rumour rounds for the Hyundai BA/i15.

[Pancham]

Does this mean that the prices of diesel i20s and Vernas will go down?

[i74js]

Originally Posted by Pancham

Does this mean that the prices of diesel i20s and Vernas will go down?

Not immediatly, but this could be one potent tool in the hands of HMIL to adjust pricing according to market situations.

Also, it is important to note that this is not a diesel only production facility, the plant can produce both diesel and petrol engines. Hyundai can thus optimize both petrol and oil burner production and can also use it for exports.

In terms of products both petrol and diesel motors of HMIL are very good at reliability, it could be possible that Hyundai permits use of its engines to other car manufacturers.

At present FIAT is providing engines (DDIS / Quadrajet) to MSIL, Premier Auto & Tata, Renault is providing to Nissan, Ashok Leyland & Mahindra (K9K).

GM has exactly the same engine as that of FIAT (it was jointly developed by FIAT & GM so no royality to FIAT by GM), there is a possibility that GM might open up for letting their engine (Smartech) being used by other players. In any case GM is not doing good business, this could be a respite for them.

Toyota is also importing their diesel motors (D4D) from Japan, which is not letting them bring down costs due to import duties. Let's see how they move, as they seem to be still delebrating on having this facility in India.

All in all a good move by HMIL to consolidate its position in India by providing good and stable products and localization by reducing dependance on imports thus hedging away from the volatility of Rupee against USD.

[anujatwork]

I must congratulate Hyundai for an early awakening! Unfortunately, our Govt will never be able to come out with a firm auto fuel policy thus keeping such investments on tenterhooks always!