Is Maruti Suzuki developing sub-1litre diesel car?

India's largest passenger car maker Maruti Suzuki is developing a sub-1litre diesel engine and the car could be unveiled by the first half of 2013, according to CNBC-TV18.

The company's plans to focus on developing a diesel engine for small car come in the wake of sharp difference between petrol and diesel prices in India.

In the last one year demand for diesel cars has jumped many-fold after petrol prices were hiked several times. Waiting period for Maruti Suzuki's diesel powered Swift hatchback and the compact DZire, for instance, now stretches to 6-7 months.

At the same time, sales of Maruti's mini cars like Alto, A-Star and WagonR have slowed.

Sales of Maruti Suzuki's compact cars (Swift, Ritz, Estilo) surged near 24% in March, while mini car sales slipped 10%.

Maruti Suzuki's proposed small car is currently under development in Japan and engineers of both Maruti and parent Suzuki are working on the product, the CNBC-TV18 report said.

The company has already announced plans to set up a diesel engine plant at Gurgaon with an investment of Rs 1,700 crore.

Maruti Suzuki said that as a matter of policy it wouldn't talk about particular future models, only saying it was working on future models for many years.