[DWind]

Hyundai is looking to start a Diesel plant along with a Greenfield plant, as per the article below. Looks like the plant might not be in Chennai (a la Ford which is also exploring Gujarat for its second plant)

Economic Times

[pradkumar]

NEW DELHI: The slowdown in the Indian automotive market has resulted in its first major casualty, with the country's second largest car-maker Hyundai Motor shelving a plan to set up a diesel engine manufacturing plant at an investment of Rs 400 crore.

The wholly-owned Indian subsidiary of the Korean auto giant, which has witnessed a sustained decline in sales over the past couple of months, cited sluggish demand as the reason for putting the project on the backburner for the time being.

Slowdown effect: Hyundai shelves new diesel engine plant - Economic Times

[RSR]

Hyundai choosing to put its diesel engine plant on the back burner (for now) is such a big disappointment!

The future of petrol cars looks very dim, given the insane fuel pricing policy of the central government and the oil PSUs.

Even if it requires a big investment (Rs.400 crore), the company should have gone ahead and set up the plant as they would reap rich rewards in the future. Some one at HMIL must take up the responsibility and inform the bosses in South Korea that ignoring the diesel segment would be catastrophic for Hyundai in the long run.

Even if the market is in a slowdown mode, diesel cars are still selling quite well and there is a waiting period for some models. The i20 can generate even more sales if the i20 crdi had a locally made engine which would push its price down to competitive levels. Cars like the i10, Santro and even the new Eon would do resoundingly well if they had a small 1.1 litre crdi under the hood (in different states of tune).

Let alone diesel, the company is not even proactive on the alternate fuel front (LPG/CNG). Only the Santro and Accent have factory-fitted LPG kits while I believe CNG kits are a dealer option. Compare that to Maruti Suzuki which offers factory-fitted CNG and LPG kits on many models. MSIL has also bet big on diesel (even buying engines from Fiat's plant) and is harvesting the bounty.

The planners are Hyundai are taking a wrong turn, for sure. Customers are avoiding petrol cars and even loyal customers will walk away if Hyundai doesn't offer diesel and LPG/CNG options.

[arvi86]

Originally Posted by pradkumar

The slowdown in the Indian automotive market has resulted in its first major casualty, with the country's second largest car-maker Hyundai Motor shelving a plan to set up a diesel engine manufacturing plant at an investment of Rs 400 crore.

That's such a big disappointment and a bad decision by Hyundai Motor India, considering the following factors:

1. In the current market scenario when every car with a diesel option is seeing an upswing in sales, Hyundai is taking a wrong decision at the wrong time. GM timed it perfectly when it launched the Beat Diesel and the more-than-doubled sales after its launch just proves the point.
2. Hyundai's CRDi engines have quite a fan following in India, thanks to the then-brilliant Accent CRDi which introduced the common-rail technology to the masses in India. Cars like Verna and i20, despite their flaws, are selling so strongly, courtesy their CRDi engines.
3. Cars like Santro and i10, despite the major shortcoming of not having a diesel option, are still top-sellers. With a punchy diesel under their hood, who knows, their combined sales could have challenged the Alto.
4. Lastly, with Maruti-Suzuki trying for a deal to get the 1.0L diesel engine from Fiat which will eventually find its way under the hood of Wagon-R, Alto and Estilo, Hyundai's small car lineup will be under serious threat.

Inspite of the huge investment, they should have gone ahead and made those engines in India. They would have surely reaped the benefits two or three years down the line.

[needforspeed88]

Hyundai is taking a huge risk by assuming their opponents will not be coming with diesel power trains for their smaller cars .GM already have a 1 liter engine while Maruti won't be sitting behind either . Tata will be bringing in the diesel engine forthe Nano .With diesel price being regulated by the Govt . i think the price differentialbetween price of petrol and diesel does not look like it is going to shrink .In the coming days small diesel cars are going to be the order of the day andHyundai take the risk of coming late to the party

[MaserQ]

The plan was to manufacture the 1.1, 1.6 & the 2.0 litre diesel engines at this facility. Now the introduction of the small 1.1 diesel looks doubtful for the immediate future. Which is too bad as they do not have a diesel option for cars below the i20.

[arvi86]

Originally Posted by MaserQ

The plan was to manufacture the 1.1, 1.6 & the 2.0 litre diesel engines at this facility. Now the introduction of the small 1.1 diesel looks doubtful for the immediate future. Which is too bad as they do not have a diesel option for cars below the i20.

I know from reliable sources that Hyundai was not planning to make the 2.0 liter diesel engine here. Their plan was to make 1.1, 1.4 and 1.6 liter diesels here to power their range of small and mid-size cars. But, as you said, the small diesel looks to be a remote possibility now and that's very very bad.

[misquitas]

Originally Posted by pradkumar

NEW DELHI: The slowdown in the Indian automotive market has resulted in its first major casualty, with the country's second largest car-maker Hyundai Motor shelving a plan to set up a diesel engine manufacturing plant at an investment of Rs 400 crore.

Slowdown effect: Hyundai shelves new diesel engine plant - Economic Times

Slowdown, for diesel vehicles? Am I missing something somewhere? On the contrary, given the huge demand for diesel cars, Hyundai should have introduced a diesel variant on the I10 a long time ago. Almost all other manufacturers have diesel options for their popular hatches.

Hyundai could well be following a different approach. Why waste the Rs 400 crore, when...

1. There is already an unrest in the workforce of your main rival company.

2. Once production of cars is halted/disrupted or slows down at your main rival's plants, customers will immediately turn to you for your cars. Even if most of your cars are petrol, demand will be high simply because cars are not available with your rival.

3. Once demand of your petrol cars are high, you scrap plans to set up a diesel engine manufacturing plant.

[Shrek_924]

Mod Note : Please continue the discussion in the new thread. Thanks

Originally Posted by misquitas

1. There is already an unrest in the workforce of your main rival company.
2. Once production of cars is halted/disrupted or slows down at your main rival's plants, customers will immediately turn to you for your cars. Even if most of your cars are petrol, demand will be high simply because cars are not available with your rival.
3. Once demand of your petrol cars are high, you scrap plans to set up a diesel engine manufacturing plant.

The demand for petrol cars will be short term and as of now the labour unrest seems to be in vain (A Rs.1 cr package to union leaders and all their issues seem to have been resolved )
The plant would have been a strategic investment and would have been operational in 12-24 months, by which time Maruti would have started their Gujarat plant too. Also their factories are not running to capacity due to paucity of demand for petrol vehicles, so short term demand should not affect long term strategy.
IMHO they are already 2 years behind in their plans. This thread was started in 2009, so they did not want the plant when demand was high in 2010-11 and now that demand has slowed down, they still do not want a diesel factory!