Motor Industries Co. Ltd (Mico), the second largest auto component maker in the country, is designing a diesel engine system for the Tata Ace light commercial vehicle, which may also be used in the Rs1 lakh car being made by Tata Motors Ltd, said a person familiar with the matter.
The 700 cubic capacity (cc) diesel engine system will possibly be the smallest such engine in this category, the source said. Currently, India’s largest-selling small car Maruti Udyog Ltd’s Alto, has an engine capacity of 800cc, though it is a petrol engine. The smallest diesel engine with similar technology, referred to as common rail diesel injection, or CRDi, is a 1300cc engine powering Maruti’s Swift brand.
Mico, which is a unit of German company Robert Bosch GmbH, may have contracts to supply components for as much as 20% by value of the Rs1 lakh car, said a component vendor, who didn’t wish to be identified because the information is confidential. Bosch is investing Rs1,800 crore in India between 2005 and 2008 to expand production, particularly of diesel engine components.
Mico chairman and managing director Albert Hieronimus said he “can’t confirm this, but won’t deny this too.” Debasis Ray, spokesperson for Tata Motors, declined to comment on the issue. Tata is planning to introduce the car next year.
Two weeks ago at a press conference in Germany, Bernard Bohr, chairman (automotive group) at Robert Bosch GmbH, said the company expected such engine systems’ “sales in India and China will increase significantly from 100,000 systems in 2007 to 1.3 million in each of the countries by 2010,” as it targets the low-cost car segments. According to some component makers, Tata Motors’ projects sales of the Rs1 lakh car at one million units a year in five years.
Diesel is a popular fuel among Indian consumers and it is priced at 70% what petrol costs. Diesel prices are subsidized by the government as it is considered the common man’s fuel.
The Tata Ace is the largest selling light cargo carrying vehicle in country with sales of more than 60,000 units a year. Tata, which last month introduced a people carrier version of the vehicle, has built a second plant in Uttaranchal, which will make 225,000 units of the Ace a year, once the company gets environmental clearance to start production.
The new engine is also necessary for the Ace to meet the Bharat Stage IV emission norms that take effect from April 2010, said the person familiar with the matter. The new norms will require cleaner engines.The current engine of the Ace doesn’t meet the norms.
The Rs1 lakh car, cheaper by half than the Maruti 800, will be introduced initially with a petrol engine, said the chief executive of a parts making company, which is a supplier to the Rs1 lakh car. The car has stoked interest in international and domestic vehicle makers, and prompted Renault SA head Carlos Ghosn to say he is interested in exploring cars made at that price.