Piaggio India plant to roll out engines by end-2009

By Rakesh Sharma

NEW DELHI (Reuters) - Italian scooter maker Piaggio's India unit will begin production at a diesel engine plant being built in Maharashtra by the end of 2009, a senior company official said on Wednesday.

"We are creating the facility with a capacity of 200,000 engines. The progress is on schedule. The investment envisaged is in the region of 60 million euros," Ravi Chopra, managing director of the local unit, told reporters.

It plans to make engines for three-wheelers and four-wheelers at the facility, and Chopra said capacity would be further expanded if there is demand.

He said the plant would meet domestic demand and also supply engines to the firm's Italian parent, best known for its Vespa two-wheeler.

Chopra was speaking at a news conference to launch Piaggio's new line of ape' -- known in Europe as Ape -- passenger and cargo three-wheelers that run on compressed natural gas and liquefied petroleum gas.

In March, the company said it wanted to build engine plants in Asia to expand as growth at home had stagnated.

Piaggio India gets its three-wheeler engines from Greaves Cotton Ltd and Lombardini.

With sales of 62,725 units in April-August, Piaggio commanded 30 percent of India's three-wheeler market, industry data showed.