"The preferred option is to do it jointly with Indian vehicle manufacturer," company general manager (marketing) Rajeev Ranadive said. The Steyr India is also planning to get into a joint venture for transmission manufacturing to make it the only company to manufacture both engine and transmission systems.

For the engine business, the company is also exploring the option of licensing it to a global manufacturer who will manufacture it in India and supply to the global market. Similar licences have been granted in Russia and China. "The licence would involve a lump sum payment and royalty and we are willing to put a part of the lumpsum into the equity of the proposed Indian venture," Mr Ranadive said. He expects to finalise the deal in three months time with Pune as the most probable destination for the plant.

These engines will be available for automotive, marine and generator applications. Currently in the Indian auto market, Volvo uses unit injection engines for its trucks and Skoda could be another customer for this type of engine when its project takes off. The high fuel economy engines have been specially designed for developing markets. It is a family of engines with three, four, five and six cylinders with a power range of 60 HP to 250 HP and could go into a range - from small cars to trucks and special vehicles. This range will enable the manufacturer to have a single facility for a broad application range in smaller volumes per application. The engine has been designed and manufactured by Steyr Motorentechnik Ges mbH, which is a subsidiary of Steyr-Daimler-Punch Austria. This company is now under the Magna umbrella.