FACED with rising crude oil prices, Indian automakers are getting back to the drawing board to design more compact vehicles with smaller engines that burn lesser fuel. While a vehicle with smaller engine may be less powerful than current models, it would be far more fuel efficient, say most top auto companies including Mahindra & Mahindra and Tata Motors. But consumers may not see new engines overnight as typically, building a new engine platform takes 12 to 15 years. However, the process for modifying existing engine designs has started as crude prices are not expected to soften soon, say some senior executives that ET spoke to. "With engine platforms being developed for a longer timeframe, our newer engine programmes would look at smaller engines that are more fuel efficient,' says Mahindra & Mahindra president (automotive business) Pawan Goenka. Auto majors are also waking up to ecological concerns and speeding up development of alternate fuel technology (hybrid and electric) vehicles. Tata Motors, for instance, is in discussion with US auto major Chrysler to develop electric versions of its trucks. According to Tata Motors executive director, commercial vehicles, PM Telang, "Companies will be forced to use components such as radial tyres and compact engines to get better fuel efficiency. This is an ongoing process for us.' In fact, Indian auto majors are betting on their fuel-efficient engines to make inroads into markets like the US. They expect US and European markets soon to start looking at diesel-powered vehicles to tide over large gasoline prices. "America is primarily a gasoline-oriented automobile market and access to diesel engines would increase as steep oil prices make a dent in the world's largest consumer market,' says an industry expert. Crude prices have doubled to more than $130 a barrel, thanks to increasing demand from China and India as well as a cut in production by Opec members. In fact, according to analysts, Indian automakers may soon start developing diesel-powered vehicles for developed markets. Even in the US, where gas-guzzling pickup trucks are quite popular, the recent bout of oil hikes will have a profound shift in customer preferences, they say. Modern diesel engines are refined and do not have traditional negatives such as noise, smell and lower power, say analysts. At the same time, the running cost of a diesel engine is half that of a petrol one. Industry experts say diesel-powered vehicles manufactured in the country are fuel efficient and use of modern technology will help automakers improve efficiency and performance with lower emissions. Meanwhile, a surge in demand for utility vehicles helped the Indian auto market do reasonably well in the first month of the new fiscal. The regular rollout of new variants and models keep excitement over the badge alive and helps bring in fresh footfalls for the volume models. Also utility vehicles (UV) have shown better growth than passenger cars in the first month of the fiscal, although the base for the UVs is smaller. UV sales in April went up by 31% to 22,203 units and cars went up by 17% to 98,740 units. The categories showing a de-growth in the April were passenger carriers (heavy commercial vehicles), goods carriers (three-wheelers) and mopeds following tighter liquidity conditions. Customers in urban areas want a sporty feel and driveability with price and fuel efficiency being not that much of a concern. In fact the semi-urban and rural area customers are far more price sensitive. Pricing has always been a key issue in this market. lijee.philip@timesgroup.com