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Hyundai may move some of its diesel engine production to a plant in India, reports have suggested.

The South Korean conglomerate said that India was becoming such a large market for its diesel cars and that moving some production to the country would be cost effective. It has earmarked $500 million to raise its share of the car market in India by 25 per cent.

It is believed that the diesel engines will be used within the firm's Getz and Santro models. Currently Tata is the largest maker of diesel powered cars in India, and sells the only affordable model available in the sub continental country.

Bloomberg reported S.S. Yang, managing director of Hyundai India, saying on October 14th that: "Diesel engines are gaining a lot of popularity in India. As oil prices are rising, customers are wanting diesel engines which have lower running costs."

Manufacturers have been claiming worldwide that diesel ownership has increased on the back of increased petrol costs and better fuel economy from diesel engines. Hyundai said that 13 per cent of their sales had been diesel between January and September.

Other car companies have claimed that the cars are in greater demand. Ford said their diesel sales had increased by 250 per cent over the last four years.