Hyundai is reportedly considering opening a $550 million diesel engine factory in India designed to serve that burgeoning market. The plant would supply Hyundai’s Chennai, India, assembly plant, which builds the company’s diminutive i10 hatchback.
The i10 was designed specifically for the Indian market, although it is sold in a number of European, Asian and African markets as well. It currently offers a South Korean-built 1.1-liter diesel, but that engine is installed only in higher-specification i10s marked for export.
A company representative said that the automaker is mulling producing the diesel engine locally in India in an effort to reduce the company’s break even point for the powertrain. Hyundai says that i10s sold in India tend to be lower-specification, entry-level models that compete at a more competitive price point than export i10s sold abroad.
The automaker says it needs to forecast demand of between 150,000 and 200,000 diesel-equipped i10s in order to justify the additional Indian assembly plant.
“We initially want to localize some critical engine components in India,” a Hyundai source in Seoul told the Indo-Asian News Service. “Once that is done, making other components like cylinder block heads is not a problem.”
Hyundai is India’s largest vehicle exporter.
References
1.’Hyundai Motor mulls…’ view
Source: Leftlane