Maruti Suzuki aims at producing 700,000 diesel engines by 2014 to meet growing demand

Come 2014, Maruti Suzuki will produce no less than 700,000 turbo diesel engines, up from its current capacity of 300,000 units. Maruti Suzuki sources another 100,000 engines from Fiat India every year, making for a total capacity of 400,000 diesel engines each year, for use in its hot selling small car range. Maruti Suzuki’s new diesel engine plant at Gurgaon will begin producing 150,000 engines each year from the middle of 2013. By the 2014, the capacity of this plant would be raised to produce 300,000 units annually, taking Maruti Suzuki’s total diesel engine capacity to 700,000.

2012 Maruti Suzuki Ritz Facelift used as an illustration

In other words, this means that Maruti Suzuki hopes to sell 700,000 diesel engined cars in India in 2014, which translates to about 60,000 diesel powered cars each month. At a time when most other automakers are jittery about setting up diesel engine plants, Maruti Suzuki seems very bullish on the fuel, which continues to be 66% cheaper than petrol. Also, diesel engines are inherently more fuel efficient and torquier than petrol engines, which makes them the overwhelming choice amongst most car buyers in India, so much so that amongst Maruti car models that have both diesel and petrol engine variants, the company sells diesel and petrol cars in the 80:20 ratio.

Due to the high demand for diesel engined car models, especially in Maruti Suzuki’s car range, waiting periods have been a big bugbear that buyers have to contend with as diesel engines have always been in short supply. This should be somewhat brought under control by 2014, as Maruti is boosting diesel engine production in a big way. Currently, Maruti Suzuki produces six car models with diesel engines, namely the Swift hatchback, the Ritz hatchback, the Swift Dzire compact sedan, the Swift Dzire full size sedan, he Ertiga MPV and the SX4 sedan.

In the future, expect more Maruti Suzuki car models, especially in the entry level range to join the diesel brigade. There has been some talk about Japanese automaker and Maruti’s parent company, Suzuki, developing a sub-1 liter, small capacity turbo diesel engine for use in entry level car models. That said, the Indian government remains ambiguous about diesel price deregulation as well as imposing additional tax on diesel engined cars to compensate for the subsidy benefit that diesel enjoys. This are a few risks that Maruti seems to be willing to take, which other automakers like Hyundai and Toyota are shying from. Only time will tell whether Maruti’s diesel gamble pays off.

Source BusinessStandard