India's largest car maker Maruti [Get Quote] on Wednesday said the diesel engine plant being set up jointly with Japanese parent Suzuki Motors at Manesar in Haryana will be operational by the first quarter of 2007.

Launching Maruti's first driving school in Bangalore, Maruti managing director Jagdish Khattar told reporters that engines produced at the new plant will be fitted to Maruti's bigger cars, besides catering to global requirements of Suzuki.

"It (diesel engine) can't be for a small car. Not in Maruti 800 or Alto, this engine needs a heavier platform," he said, adding, the capacity and investment plans for the new engine plant were yet to be worked out.

Khattar said preliminary work for building a second car plant at a 600 acre land in Manesar along with the diesel engine unit had begun.

He was evasive on the possible price increase due to hike in steel and petrol prices.

"Last year the industry grew between 25 per cent and 27 per cent, and this year the growth has been less so far at about 18 per cent till February," Khattar said.

He said Maruti will launch "Swift" a mid-sized sedan in the middle of this year, which will be positioned above the Maruti Esteem. It will have a 1.3 litre petrol engine and come in new colours.