MUMBAI – Ford India Ltd. this month launches a new diesel version of its popular Endeavour SUV.

The latest model comes equipped with Ford Motor Co.’s turbo-direct common-rail injection (TDCi) technology.

“It’s a supreme combination of the latest in vehicle engineering,” says Ford India Managing Director Arvind Mathew.

The 16-valve, 2.5L engine delivers up to 30% better performance with 141 hp and 243 ft.-lbs. (330 Nm) of torque, for faster acceleration and better drivability, he says.

The new engine tops the fuel efficiency of India’s SUV segment vehicles and beats the Endeavour’s former diesel mill by 25% with a highway fuel economy of 31 mpg (7 L/100 km).

Ford, which currently assembles 60,000 vehicles annually at a plant in the southern city of Chennai, purchases gasoline engines from Hindustan Motors Ltd. and imports its diesel engines.

Analysts say India’s escalating fuel prices and increasing competition are prompting a shift to clean-diesel cars. They expect the segment to jump to 35% from 30% by 2010.

The Endeavour, which offers an all-diesel range, is built with 30% local parts and the remainder imported from Thailand. The auto maker reportedly has sold 7,000 units since the vehicle’s launch in 2003, giving it a 38% share of the premium SUV market here.

“We can compete in the new segments that are growing in the Indian market with our existing products, as well as the new products that we develop,” says Scott McCormack, vice president-marketing and sales at the launch of the new Endeavour variant.

Ford India also sells a diesel-powered Fiesta and plans to bring a diesel Fusion sedan to market in the third quarter.

The auto maker’s longstanding strategy in India consists of four elements: meeting customer preferences; managing with as few new models as possible; updating its vehicles with the latest diesel technology, modern engineering, better refinement and higher fuel efficiency; and ensuring profitability.

For 11 years, Ford India has managed well on all these counts, just with fewer models. Passenger cars include the fuel-efficient Fiesta 44 mpg (5.3 L/100 km), entry-level Ikon and midsize Fusion hatchback.

The TDCi-powered Fiesta is responsible for 70% sales of Ford India’s sales.

The flagship Ikon, developed in and for India, has sold 190,000 cars in its eight years here. “Ikon has been a big success story, and we are very proud of what it has accomplished in the Indian market,” McCormack says.

The ’07 model with the TDCi diesel mill has been refined to appeal to young aspiring executives and continues to sell well. Complete-knocked-down kits are exported to Mexico, South Africa and China.

The popular Endeavour, with its ruggedness and commanding road presence, continues to be a leader in its segment. Rivals include the Honda CR-V, Mitsubishi Pajero, Nissan X-Trail and Hyundai Tuscon.

Ford’s solitary gamble has been with its Fusion hatchback. Despite a facelift last year, monthly sales have yet to exceed 250 units. The car now will sport a 1.4L Duratorq diesel.

Additionally, the length will be cut 0.7 ins. (18 mm) to make it eligible for the lower 16% small-car excise duty against 24% duty for larger cars.

However, the company still lacks an offering in the important subcompact segment to compete against new entries such as General Motors Corp.’s Chevy Spark.

While officials are mum on this subject, Ford currently is considering a 1.4L diesel engine plant in India with a 400,000-unit annual capacity. “It depends on volume and technology and local opportunities,” McCormack says.

Ford India sales rose 45% to 41,797 in fiscal 2007, ended March 31, he says. In addition to domestic sales, the company exported 22,989 CKD cars during the year. Industry data does not count CKD exports as vehicles.

“We may do better, but we stay conservative in our planning,” McCormack says. “We are constantly tuning in to emerging customer demands and freshen our models to satisfy their desires.”