Hyundai to Boost Diesel Car Output in India

Hyundai Motor Co. says it will increase production of diesel-powered versions of its i20 hatchback and Verna sedan in India by 50% to a combined 10,500 units per month.

Hyundai says the added supply will reduce long waiting periods for both models. To achieve that goal, the company is boosting exports of diesel engines from South Korea to India.

Hyundai says it approved the plan after the Indian government decided not to hike taxes on diesel-powered passenger cars. Such models have grown in popularity because diesel fuel prices in India are nearly 40% less than those for gasoline.

The company also intends to revive plans to build a diesel engine plant in India, The Wall Street Journal reports. Arvind Saxena, director of marketing and sales for Hyundai's India unit, tells the newspaper Hyundai will announce the project within two weeks.

Saxena says the company suspended its earlier plans for a diesel engine plant amid uncertainty about government tax policy, which has now been resolved. He did not disclose the engine plant's cost, capacity or location. But Bloomberg News reported last May that Hyundai planned to invest 4 billion rupees ($77 million) to build a plant in Chennai with capacity to make 150,000 diesel engines per year.