Maruti Suzuki India plans to enter the fast-growing sport utility vehicle segment and will display a concept at the Auto Expo in Delhi next January.

 “It will take at least two years for the model to be production-ready. The details regarding engine and other specifications will be worked out soon,” Live Mint reported, citing sources.

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A Maruti executive said the automaker had not decided to develop the SUV itself or adapt a model from parent Suzuki but confirmed that the vehicle would be engineered in India.

According to the Society of Indian Automobile Manufacturers, 7% – 8% of the 2.5m passenger vehicles sold in the country each year are SUVs with the segment dominated by Mahindra & Mahindra and Tata Motors.

Mahantesh Sabarad, senior vice president, equity research, Fortune Equity Brokers (India), said, “SUVs are taking a larger chunk of the market. They will account for 15% of the total market in the next 10 years.”

Maruti sells mainly small cars like the Alto, Swift and Wagon R. Its share of the passenger vehicle dropped to 40% in fiscal 2011 from 45% in FY10 as more carmakers have entered the small-car segment.

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In order to regain market share, Maruti has begun expanding its model line. This year it introduced the Kizashi, a premium sedan in India and a D segment car in Europe.

The Maruti executive added that the production model of the RIII – an MPV concept exhibited at the 2008 Delhi show will be launched at the 2012 event. The MPV will reach showrooms early in 2012.

Sabarad of Fortune Equity stated, “It’s going to be tough ride for the company as it does not have a diesel engine. It should look to develop its own diesel engine in the future. Another thing that the company needs to keep in mind is a good suspension. SUV suspensions are what make or break a vehicle.”

Neither Maruti Suzuki nor Suzuki Motor Corporation has a diesel engine of its own. Chairman RC Bhargava has said that Maruti has decided to develop a diesel engine as the company is unclear regarding the government policy over deregulation of the fuel’s price.

Bhargava said: “We don’t know the government’s stand on diesel pricing. We will have to act accordingly.”