Indian carmaker Maruti Suzuki India is planning to build its third diesel engine plant in Mehsana district of Gujarat, India with an investment of INR180bn ($3.2bn).
Maruti Suzuki India chairman R.C. Bhargava was quoted by livemint.com as saying that building an engine plant in Gujarat makes sense as that will cater to the company's next phase of manufacturing, and it doesn't make sense to make engines in Gurgaon and send it to Gujarat.
"Our internal sales target is 2 million cars by 2015-16, and if there is no policy clarity on diesel pricing, the demand for diesel cars will rise further," Bhargava.
The plant is expected to be launched in the middle of 2013, will initially develop 150,000 units, which is expected to double to 300,000 by the subsequent year.
Maruti already operates two car manufacturing plants in Gurgaon and Manesar, both in Haryana, which are expected to support the company's peak production level to reach 1.7 million vehicles by the fiscal 2013.
Currently, Suzuki Powertrain India manufactures 300,000 diesel engines for the Indian carmaker, and the carmaker has also entered a three-year agreement with Fiat Powertrain technologies to purchase 100,000 diesel engines per year.
Maruti said that its diesel engine capacity is expected to reach 700,000 units by 2014.
