The company proposes to fund the investment from internal resources, the sources said. They added that the engines would be supplied from the Greaves plants at Ranipet and Aurangabad.

The Rs 700-crore Greaves is gearing up technically to upgrade its smaller engines up to 12 hp to meet the Euro-II norms, which will be supplied for the Garuda autos at its Baramathi plant in Maharashtra. It is being upgraded with its existing technical collaborator Lambardini of Italy.

The Greaves Garuda auto was introduced in 1994, and is the market leader in the diesel auto segment with about 80 per cent share, the sources said. They said the engines being developed would also be utilised for other applications like gensets,automobile equipment, and load-building machineries. With the buoyant farm market condition, Greaves also plans to manufacture power tillers. At present, the company is importing it from a leading Chinese company, Dong Feng. The company will tie up with a leading foreign firm to manufacture horizontal engines for the same.

Greaves will introduce the SameGreaves 503 tractor in the sourthern market soon. First, it will be launched in Tamil Nadu in July/August, followed by Andhra Pradesh in October. For this, the company has finalised an elaborate dealer network. It has already been introduced in Madhya Pradesh, Punjab, Rajasthan, and Gujarat, the sources added.

With the southern launches round the corner, the company hopes to sell around 10,000 tractors in the first year. "Though there are many competitors in this segment, we are competing with Ford at the lower price with the same features the Ford tractor has. Soon, we will become a market leader in this segment," the sources said.

The Ranipet plant isfully commissioned with a Rs 45-crore investment, and has an installed capacity of 15,000 tractors annually. The plant has provision to increase the engine power between 60 and 70 hp capacity. At present, the plant is engaged to produce 50 hp power engine.