MUMBAI, January 28: Automobiles Peugeot is believed to have initiated discussions with Maruti Udyog Ltd (MUL) for fitting the TUD5 diesel engine in the Esteem. Talks are reportedly at a preliminary stage, sources said. MUL officials, however, declined to comment.At present, the two companies have an understanding for fitting the diesel engine in the Zen and Gypsy. The Esteem was not included at that time as it would have competed with the Peugeot 309 GLD, a product of PAL-Peugeot, which was fitted with the same TUD5 engine.
Now with Peugeot deciding to withdraw from its Indian operations, production of the 309 has virtually come to a standstill. The responsibility of restructuring PAL-Peugeot is now in the hands of Premier Automobiles and the entire process is likely to take some months. Till that time, both the diesel and petrol versions of the 309 are not likely to surface again on Indian roads.
Hence, the idea of extending the diesel engine to the Esteem would make enormous sense to AutomobilesPeugeot and also to MUL given the marked preference by the consumer to diesel. Though talks are still at an early stage, the diesel-driven Esteem would be a keen competitor to the diesel versions of the Ford Escort, Mitsubishi Lancer and Opel Astra. The advantage would not only be on the price front but also in the fact that the TUD5 engine is among the best of its kind in the world.
The mid-size segment has seen a distinct tilt towards diesel cars. The Ford Escort is a case in point where over 75 per cent of the bookings were for the diesel version. This prompted PAL-Peugeot to introduce the 309 GLD which was competitively priced but could not make much headway due to problems at the Kalyan plant. The current year will see two more diesel entrants in the mid-size segment, the Lancer and Opel Astra priced at Rs 8 lakh and Rs 10 lakh each. The petrol-driven Esteem has, in any case, been the winner in sales during the last three months. Others like the Cielo, Escort (diesel and petrol) and Astra have been waybehind. "A diesel engine for the Esteem will ensure that MUL will have a successful product that can take on emerging competition, especially the Honda City," dealers said.
It may be recalled that Automobiles Peugeot has also entered into an understanding with Hyundai Motor Company for fitting the TUD5 in the successor to the Accent. This will be an option to the petrol version and the car will make its debut simultaneously in Korea and India. Hyundai is also developing its own diesel engines for its small cars.
MUL, in the meantime, is getting set to introduce the Zen diesel in May. Peugeot has planned to supply 10,000 TUD5 engines for the current calendar which would mean that the six-month period will see an average output of 1,500 diesel Zens. The French automaker has also arranged to supply an identical number of engines in 1999, but these may be taken up by the Gypsy also when it is ready to be launched.
The petrol version of the Zen is already doing well and MUL's idea of introducing a dieselcounterpart would be to compete with the diesel Uno and Telco Mint. The Mint will be the least expensive, followed by the Uno while the Zen will be the dearest at around Rs 4.75 lakh.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
