MARUTI, PEUGEOT
IN TALKS FOR DIESEL ENGINE PLANT
The country's largest car maker Maruti Udyog is getting aggressive
about its diesel project now. The company is learnt to be in
negotiations with Peugeot of France to set up a dedicated facility
to manufacture diesel engines for passenger cars and sports
utility vehicles.
Maruti officials, however, refused to
confirm or deny the move. "We have already announced
plans to set up a diesel engine facility and various options
are being considered,"
Peugeot already supplies diesel engines
to Maruti for the Zen and Esteem models. However, shortage
of Peugeot engines have affected sales of the Zen diesel in
the past. Suzuki officials have, meanwhile, said they want
Maruti to have its own capability for the production of diesel
engines.
Sources, however, say that the two companies
have already held initial round of discussions and another
round of negotiations is planned for later this month. In
the meantime, Maruti engineers are learnt to have visited
various engine component manufacturers in India to check their
readiness to meet the requirement of the proposed unit. "We
had an initial round of negotiations with Maruti. However,
nothing definite has been indicated by them so far,"
said a senior official of a leading engine component maker.
Though details of the project can't be
confirmed, the unit is most likely to be set up as a joint
venture with French vehicle maker. The proposed unit is learnt
to have the blessings of Maruti's parent, Suzuki Motors of
Japan, as well. It will not only meet Maruti's requirement
but will also service other vehicles manufacturers in India
and exports.
"The project would be similar to
what Hindustan Motors is trying to do," says a source
close to the development. Hindustan Motors' has emerged as
one of the largest suppliers of engines and power trains in
India and its client list includes Ford Motors and General
Motors India (GMI).
At present, diesel-powered vehicles account
for just 5% of Maruti vehicles sold in India against the industry
average of 15%. The company plans to narrow this gap.
Peugeot, part of PSA Peugeot Citron group,
is one of the world's largest manufacturers of diesel engines.
During '03, 65% of Peugeot and Citron models sold in France
were equipped with diesel engines.
PSA Peugeot Citron is the second largest
carmaker in Europe with 2.46m vehicles sold in '03. It ranks
first in France , its home market, with 33.9% share of the
combined passenger car and light commercial vehicle market
in '03.
