The Indian arm of German engineering giant Bosch said on Jan. 4 it would invest more than $400 million over two years to expand in the country's fast-growing diesel engine market.

"India is witnessing a strong increase in demand for diesel engines," the company, a major maker of diesel injection systems, said.

"The diesel engine consumes 30% less fuel than the gasoline engine, while common-rail technology reduces the pollutant emissions of diesel engines, thus making it possible to meet strict emission standards."

Bosch introduced common-rail fuel injection systems in India in 2006, adding nearly a quarter of the new investment would be earmarked for research.

India is Asia's third-largest car market after China and Japan, where Japanese-owned Maruti Suzuki holds a commanding lead. Indian car sales are expected to cross two million units next year.

Bosch Automotive Group chairman Bernd Bohr said that sales in India grew by 5% to $1.4 billion in 2009. India, which currently accounts for about 5% of the company's global auto business, is likely to account for 7% to 9% of its total auto business by 2017, he said.

"India is a very important market for us, and it has been profitable as well," Bohr added.

Copyright Agence France-Presse, 2010