Indian automakers hope that developing Euro-V-compliant engines will open up new export markets in Europe and the US.

The move is also preparing them for stricter emissions rules expected to be introduced in India itself in future.

A couple of weeks ago, Maruti Suzuki officially opened a plant producing its next-generation KB-series engine. The new motor will be used in both the redesigned Suzuki Alto and the Nissan Pixo variant Maruti will supply on an OEM basis.

Maruti Suzuki managing director Shinzo Nakanishi said: “It will take engine technology to the next level in India.”

The three-cylinder, 998cc, KB series engine has distributor-less ignition with dedicated plug top coils, high pressure semi-return fuel system and advanced injectors for superior atomisation. It complies with current Indian BS III emission laws while export versions for Europe will comply with the Euro V standard.

Maruti said the new engine series would be progressively introduced on other models over the next three to five years.

“In terms of styling, carbon dioxide emission and fuel efficiency, the A Star has gained acceptance in European markets,” added Nakanishi.

In the face of a domestic slowdown, Nakanishi is counting on exports to boost production and sales volumes for 2009.

Hyundai , the largest car exporter from the country by sales volumes, is also eyeing Europe with its newly-launched Kappa engine (developed with a budget of US$421m now available in its best-selling small car, the i10 (which replaced the Getz). The updated 1.2-litre i10 model is already on sale here in the UK

Nakanishi told India’s Business Standard: “The A Star emits about 109 grams of CO2 per kilometre, which can be lowered further.”

Hyundai’s Kappa engine emits 119 grams while motors fitted by General Motors are similar, making them ideal for export with few tweaks. GM ships the Spark to Nepal while a Tata Motors ‘ joint venture with Fiat will help it export both cars and petrol engines.

With low CO2 emissions comes fuel efficiency and, in these difficult times, India has just the products many buyers in other countries might be willing to pay for.

That said, there are clouds ahead. Hyundai told the Economic Times of India that global economic slowdown has it to put up to 25% of its export orders on hold.

It has shelved US market plans for the i10 due to homologation issues but is nonetheless eyeing other new markets such as Australia and New Zealand.

“Many dealers from our major markets like South Africa, Colombia and Iceland have asked us to put on hold shipments. They have not given us any time when they would like to pick up the orders,” Hyundai Motor India managing director HS Lheem said.

He’ll get little comfort from the domestic market data. Despite three major festivals – Dussehra, Eid and Diwali -falling in the same month, the downturn in the automotive industry only got worse in October.

With November and December traditionally being lean months, any hope of a revival in sales in the rest of the fiscal is now all but over, opined Yahoo News India. It said all auto companies that have released their sales figures for the month have recorded either a decline or much lower growth in October compared to the rest of the year.

This indicated that rather than pulling the industry out of the slump, October has pushed it deeper.

“I am not satisfied with the demand in the festive season,” Hyundai’s Lheem was quoted as saying. “I wanted a 30-35% growth but what we got is much less. Adverse market situation is impacting demand.

Contrary to logging the expected double digit growth in the month, Hyundai grew by only 9.9% compared with 26.6% for the fiscal year.