With the diesel-powered vehicles looking to form a large chunk of the automobile market in the next three to four years, Ford India is planning to set up a diesel engine facility in its existing 350 acre complex in Chennai.

At present, about half to a two-thirds of the land is under utilisation at the company's existing plant in Chennai, which produces vehicles including Fiesta, Fusion, Ikon and Endeavour.

Scott McCormack, vice-president, marketing, sales and service said, "The company is currently evaluating all the feasible option plans for setting up a diesel engine facility in the country. We are also evaluating a diesel option on all our current and future products. The demand for diesel cars is growing at a rapid pace and we still haven't localised a large part of it."

The company currently sources its diesel engines from the parent company's manufacturing, based in Europe, which includes 1.4 litre TDCi engine and 2.5 litre engine. Ford will be launching its refurbished Endeavour, sport utility vehicle fitted with 2.5 litre TDCi (common rail direct injection engine) in the next few months. The new plant, alongwith the engines currently sold in the country, will produce 2.5 litre TDCi and 1.6 litre TDCi, which is expected to power the Fiesta later this year.

"We are evaluating of launching the same Endeavour which is currently sold in Thailand," said Scott.

The company has no plans to launch any new vehicle in the domestic market in the current year, but promises to re-introduce the existing range with the add-on features, which is aimed to boost its sales. Currently, the company has 2.5 per cent market share in the domestic arena.

Last month, the parent company posted a net loss of $12.7 billion for the financial year 2006, its highest since the formation of the company, 103 years ago. Ford's sales in North America, which is its core market, was $69.4 billion for the year, compared to $80.6 billion a year ago.

The company reported profits of $551 million and $469 million, respectively, from its South American and European divisions, but a loss of $185 million from Asia-Pacific and Africa.