"Our market share has slipped to 40 per cent in 2011. This was due to slowdown in the industry and lower sales of petrol models compared to diesel car production," Maruti Suzuki Managing Director and Chief Executive Shinzo Nakanishi said here.

The company will now focus on producing more diesel models. The company will be able to produce 300,000 diesel engines a year through Suzuki Powertrain, a joint venture between Maruti and Suzuki Motor's Gurgaon unit.

Maruti will also buy up to 100,000 diesel engines annually for three years from Fiat India under a pact between the Italian car-maker and Maruti's parent Suzuki Motor Corp. This is expected to help the company produce more diesel cars, Nakanishi said.

Customer preference here is fast shifting to diesel cars as the fuel is cheaper than petrol. The shift has prompted auto-makers to introduce new diesel variants and increase production of existing variants. Players like Ford have also announced plans to invest on diesel engines.

Maruti's Swift, Ritz, Swift DZire and SX4 models are sold with 1.3-litre diesel engines.

Meanwhile, Maruti has witnessed a turnaround in monthly sales after seven consecutive months of decline with a 5.18 per cent spike in sales to 1,15,433 units in January. It sold 1,09,743 units in the same month last year. Last December, its sales had declined by 7.1 per cent to 92,161 units.

"Following the turnaround in the auto industry, our first target will be to quickly cover growth of 10-11 per cent as we have had a negative growth of 17 per cent during the April-December, 2011, period," Nakanishi said.