Maruti Udyog Ltd, India's biggest carmaker, would set up a Rs 350 crore (Rs 3,500 million) diesel engine plant at Gurgaon in line with its plan to become a major player in diesel vehicles in a couple of years.

The company, which currently has insignificant presence in diesel vehicles, would source technology for the proposed plant from Fiat GM Power Train.

MUL managing director Jagdish Khattar told reporters in Bangalore that a team from FGP, a joint venture between Fiat, GM and Opel, is already in Gurgaon in this regard and the plant with a capacity to produce 100,000 diesel engines would be operational in 2006.

He pointed out that while the annual growth in the diesel segment was 13 per cent in the last three years, it was 19-20 per cent in the first quarter (April-June) of the current fiscal.

"We want to play a major role in diesel segment also. That's our next target. So far, we have been focusing on retaining our marketshare in the petrol segment. We will do so in the diesel segment also," he said.