The release, however, did not mention the vehicles which will be fitted with the new engines said to be environment friendly and fuel efficient.

At present the ailing CK Birla outfit has five vehicles under its banner -- flagship Ambassador with 2000cc Isuzu engines, Contessa with 1995cc engine, utility vehicle Trekker with 1489cc engine, rural transport vehicle RTV also with 1995cc engine and Mitsubishi Lancer with 1468 and 1998cc four-cylinder engines.

Hindustan Motors launched RTVs in August last year, in collaboration with OKA Motor Company of Australia to tap the rural market. The company estimated that with the expected growth rate in the rural economy and higher disposable income, demand for the RTV was expected toincrease.

According to industry sources, the company is likely to upgrade three models -- Contessa, RTV and Trekker.

The management felt that this move to source engines from Hyundai "reflects HM's commitments to provide products which are tailored to meet emerging customer needs".

The release quoted executive director AS Narayanan as saying: "Initially, we will be importing the complete low-emission power units and progressively localising the production over a period of time".

Announcing the arrangement, Narayanan said: "...We are confident that this alliance will enable us to offer products which are tailored to meet customer needs".