India's second largest maker Hyundai Motor India (HMIL) says it is studying the feasibility of setting up a diesel engine plant and would be in a position to announce its decision early 2011.

"We are in the midst of conducting the feasibility study on the diesel engine plant which would likely to be finalised by early 2011," said HMIL director marketing & sales Arvind Saxena, during the launch of the refreshed version of the i10 compact hatchback .
Currently, HMIL depends on imports of diesel engines for most of its variants barring the popular hatchbacks Santro & i10. The car maker has already expressed its desire to set up such a plant in order to cut product costs due to the growing popularity of diesel cars in the Indian market.
The South Korean car maker will focus on meeting growing demand in the Indian market and has a capacity to manufacture 630,000 units in Chennai plant and more than 50% of the production it exports.

With demand in Europe down, HMIL plans to divert production to the Indian market. Hyundai expects overall sales to go up to 590,000 units including exports this year from 560,000 units last year.

Domestic sales would likely touch 340,000 units from 290,000 units last year.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more