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.
