Hyundai to Build Diesel Engine Plant In India, Hike Diesel i20 and Verna Supply

Hyundai Motor India Ltd. is increasing its supply of diesel cars like the Verna and i20 in India by ramping up imports of engines from South Korea and the building of its first Indian diesel engine factory, reports said Tuesday.

Hyundai will increase imports of South Korean made diesel engines into India from the current level of 7,000 per month to 10,500 per month, the company said Monday. The decision to increase engine imports was driven by long wait times for the popular Hyundai Verna and i20 models.

Hyundai waffled for some time about increasing the supply of diesel engines while it awaited the announcement of last month's Union Budget. The Indian government heavily subsidizes diesel fuel, and there had been some question of whether it would leave the subsidy in place in the coming year. The budget for the fiscal year beginning April 1, though, did not change the diesel fuel subsidy.

Hyundai will also build a diesel engine plant in India, the Wall Street Journal reported Tuesday. Hyundai is directly competing with Maruti Suzuki India Ltd., which announced its own plans to build an Indian diesel engine plant last year.

Increased supply (of diesel engines) will ease the waiting period substantially, we expect the waiting period for the diesel Verna to drop from six months to two to three months and for the new iGen i20 to about a month, Arvind Saxena, Director of Marketing and Sales for Hyundai Motor India said Monday.

Hyundai Motor India's 2011 sales reached 373,709 cars, an increase of 4.8 percent from the previous year.