Siemens’ automotive parts manufacturing unit will create a North American headquarters in Columbia, South Carolina, for its diesel systems division as it pursues an important market, company and state officials said.

According to Dow Jones, Siemens VDO Automotive said the $US25 million project will focus on diesel fuel research and development, testing and business development for the US market.

“We have seen increasing interest from North American customers in new-generation diesel fuel technology,” Siemens VDO Automotive president and chief executive John Sanderson reportedly said in a statement. “The new headquarters allows us to leverage that interest with our diesel expertise to serve our customers.”

A company spokesman told Dow Jones the facility will employ 120, including about 70 engineers hired locally and about 50 experts transferred from Siemens’ worldwide headquarters for powertrain diesel systems in Regensburg, Germany. The company expects the new division headquarters to become a national centre for research and development, engineering and testing of diesel fuel technology, including digital valve and piezo electronic fuel injectors, diesel pumps and fuel rails.

“With climbing gas prices and stricter emissions, our customers are looking at diesel as a solution both for fuel economy and emissions reductions,” company spokesman Brad Warner told Dow Jones in an interview. “This is where our customers are, so this is where our technology needs to be.”

The news agency noted that Siemens VDO Automotive already has a joint venture with Navistar International’s International Truck and Engine Corp. in nearby Blythewood, South Carolina, producing digital valve fuel injectors for diesel engines. The joint venture, Siemens Diesel Systems Technology, was formed in 1999 and employs about 500.