India's second largest car maker Hyundai Motor India Ltd said it has put on hold its INR 400 crore diesel engine plant, which would have an installed capacity of 150,000 unit per annum, due to sluggish demand.

An HMIL spokesperson told PTI that "Given the fact that the market is not buoyant at the moment, our diesel engine plant plans are on hold at the moment. The company will hold its plans for a medium term.

The spokesman said that "Having invested USD 2 billion in India (so far), we can only move forward and stay committed to this market.”

In December 2010, Mr Han Woo Park MD and CEO of HMIL had said the company would invest INR 400 crore over 3 years to set up a diesel engine manufacturing plant with an installed capacity of 150,000 unit per annum.

He had said that "The feasibility study for the diesel engine plant has been completed and we will announce the location in the next few months. The plant is proposed to have an annual installed capacity of 150,000 units.”

The plant would have manufactured three different engines of 1.1 litre, 1.4 litre and 1.6 liter capacities only for the domestic market.

The company had planned to utilize the engine from the new plant in its new models and only a few would be used for replacing the existing models.

(Sourced from PTI)