"Producing engines and transmission systems for Matiz in India will not be economically viable for the company as sales volume in the country are very low at present," DMC director (planning and coordination) Sang Do Lee said.

"We will continue to supply these parts from korea till the volume reaches at least one lakh units annually," he added. The Indian arm of DMC, Daewoo Motors India Ltd (DMIL), has sold about 8,000 Matiz since its launch in November last, and has targeted to sell 35,000 to 40,000 small cars during the current fiscal.

Lee told visiting Indian newsmen that at the moment only the Korean plant was producing engines for Matiz and supplying these to plants based in India, Romania and Poland.

He said Daewoocould consider producing engines in Poland after some time but the same was a distinct possibility for India in the near future.

"Later when Indian automobile market becomes bigger, we would consider producing engines and gear boxes in India,'' he said.

Besides India and Korea, Daewoo also manufactures the small car in Romania and Poland.

Daewoo is now planning to manufacture Matiz in Uzbekistan and Iran to meet the growing demand of the vehicle worldwide.

"We have not been able to meet the growing demand of Matiz despite producing it in four countries -- Korea, India, Romania and Poland. So, we are now stepping up production to meet the requirment," Lee said.

The Korean plant has an installed capacity of producing 2,40,000 small cars per annum but to meet the growing demand it is already producing 4,00,000 small cars and another 100,000 completely knocked-down units.

Daewoo has also stepped up its Matiz output in Korea by extending the working hours from 5,000 hours per annum to 8,000 hours, Leeadded.

DMIL is also planning to double production of Matiz to 5,000 units per month from September to meet the growing demand, DMIL sources said.

In India, 70 per cent of the parts of Matiz are localised. Only some parts like engines, transmission and important electronic equipments are sourced from Korea.

DMIL has targeted a sales turnover of 392 million dollars and exports worth 60 million dollars during the current fiscal.