To export diesel engines to Europe

Maruti Udyog is planning to export the diesel engines manufactured in Manesar, Haryana, to its European car assembly plant in Hungary to cater to the local markets there.

"The diesel Swift is very popular in the European market and considering its growing demand in the region, we would be sourcing its engines from our base in Manesar," said a company source.

The plant, which was recently commissioned for optimal utilisation, has the capacity to produce 300,000 engines a year. Of this, Maruti intends to export a sizeable number to Suzuki's Hungarian base where the Swift is currently assembled.

The Swift is sold with a diesel engine option in Europe. Suzuki currently sources the engines from Fiat's facility in Europe for this car. The company, however, refused to divulge how many engines it would export.

The 1.3 litre multi-jet diesel engine, which would be seen in the Indian Swift in the following weeks, is a popular product jointly developed by General Motors and Fiat; Suzuki shared the licence.

Maruti Suzuki Automobiles India (MSAIL) was set up in 2005 to establish a car plant in Manesar, Haryana, with an investment of Rs 1,524 crore. Initially, MUL owned 70 per cent in the joint venture (JV) and Suzuki Motor Corporation (SMC) 30 per cent.

In 2006, MUL bought the residual stake in the JV from SMC and the company is now a fully-owned subsidiary of Maruti Udyog. The unit is now known as Maruti Manesar Plant.

Last year, Japanese auto giant Nissan had signed a contract with Suzuki to source 50,000 cars to be sold in the overseas market.

These cars would also be produced at the same plant.

The company had envisaged plans to re-enter the European market with the same car it would supply to Nissan. About 100,000 units of the car would be exported to cater to the European markets, which might be launched in 2008-09.