Carmakers rush to line up small cars in diesel variant

GM, Tata and Honda to launch diesel cars as demand surges

Carmakers are preparing to introduce smaller displacement diesel engines in the wake of growing

sales of diesel models. General Motors, Tata Motors and Honda are looking at small diesel engines to power their small car models. Hyundai and Toyota plan to manufacture diesel engines in India within the next two years.

General Motors India will introduce a 1.0 litre diesel engine in its Beat small car model next month. The company, which took three years to develop the diesel engine at Talegaon, Maharashtra, is looking to boost Beat’s sales significantly by offering its diesel at around Rs 4 lakh. “Diesel is always more fuel-efficient apart from having tendency to give better performance at lower running costs,” said P Balendran, VP, GM India. “The mileage of the diesel Beat will be more than 20 kmpl,” Balendran added. The Beat’s petrol variant already returns 18.3 km to a litre.

Honda Siel Cars India, which will launch its much-awaited Brio hatchback in the festive season, is planning a sub 1.5 litre diesel engine to power the car in the next three years. “We will have to look at an engine capacity of 1.5 litre or less (for Brio) to avail lower excise duty. This will take at least three years,” said Seki Inaba, director (marketing) at Honda Siel Cars India.

Small cars less than four metre length are eligible for an excise duty of 10 per cent with engines up to 1.2 litre in petrol and 1.5 litre in diesel. Longer cars with greater engine displacement attract 22 per cent excise duty. Tata Motors, which has seen an upswing in Nano sales, will introduce a two-cylinder sub 1,000 cc diesel engine in the ultra-cheap car later this financial year. The petrol variant of Nano already returns 23 kmpl. Tata’s Indica EV-2 model currently gives the highest fuel efficiency in the country in terms of diesel small cars at 25 kmpl.

In the premium hatchback category, about 60-65 per cent of sales of popular cars such as Swift, i20 and Polo come from diesel variants. The contribution of diesel variants in these models has also increased from about 50 per cent last year due to the widening price differential between petrol and diesel prices. Diesel cars, which cornered 23 per cent share of the market in 2005, have increased to 30 per cent in 2010. The trend is expected to continue and diesel cars are expected to corner about 35-37 per cent share of passenger cars during the next two years, according to industry experts.

Maruti Suzuki is also looking for a new diesel engine apart from the 1.3 litre diesel engine which powers Swift, Ritz, Dzire and SX4, which it sources from Fiat. “We were searching for a diesel engine below the current one we have. One reason why we got into CNG (compressed natural gas) is because we didn’t have the option of a small diesel engine,” said IV Rao, managing executive officer (engineering), Maruti Suzuki India. Japanese parent Suzuki Motor is in discussing possibilities with stakeholder Volkswagen for diesel engines, but the talks haven’t lead to any firm conclusion yet.

Hyundai Motor India has started work on a diesel engine plant, which will be operational by 2013, helping it to power its small car range such as i10 while Toyota Kirloskar Motor plans to introduce new diesel engines in its Etios range next year. Carmaker Ford India is also believed to be developing a 1.0 litre diesel engine.

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