M&M may stop sourcing Peugeot diesel engines

Mahindra & Mahindra (M&M) may no longer source diesel engines for its sports utility vehicle (SUV) exports from French company Peugeot.

The SUVs, to be exported in future, would be fitted with M&M's indigenously developed CRDi engines, which conform to Euro III norms.

"M&M is ready with diesel engines conforming to Euro III standards, which would be fitted on SUVs exported to western Europe. Gradually, we would be phasing out Peugeot's engines to our exports to the region," said Pawan Goenka, president, automotive sector.

The company has set up a completely knocked down plant with the help of an Italian company for assembling its SUVs that will be exported to Western Europe from Italy. M&M began its exports to Western Europe from this plant in April 2005 and has, since then, sold about 600 SUVs.

"The current potential market for SUVs to Western Europe, including Italy and France, is 100,000 units. We would be happy if M&M is able to corner 10 per cent of the market," said Goenka. M&M has begun selling indigenous engine-fitted vehicles to other global markets since February.

M&M would launch the Scorpio in Russia on November 4. It has dispatched 100 vehicles to that country. The company expects to double its exports for the current financial year to 6,000 SUVs.

The company expects demand from Russia, Western Europe and Malaysia to go up.

Likewise, exports to the Middle East, Brazil, Argentina, and South Africa are also expected to grow.

M&M has exported 100 vehicles to Russia, 600 each to Italy and Malaysia, 300 to South Africa, and 100 to Uruguay thus far this year.