Tata Motors unveils new petrol engine as consumer tastes shift

MUMBAI (Reuters) - Tata Motors Ltd on Monday showed off the first variant from its new series of petrol engines, expected to power some of its future cars, as the company looks to capture a returning shift in consumer preference for the fuel.

With the government allowing fuel retailers to gradually increase the price of diesel - a popular fuel in India thanks to government subsidies - the gap between the prices of petrol and diesel is narrowing, causing demand to slowly gravitate back towards petrol cars.

Tata Motors, which has seen sales plunge this year amid a wider slowdown in the auto market, generates the bulk of its passenger vehicle sales through diesel-powered vehicles.

"Petrol represents a big opportunity for us. Our play in petrol has been lower than we have in diesel," Ranjit Yadav, president of the company's passenger vehicle business unit, told reporters.

The new 1.2 litre turbocharged engine will be used in the company's compact vehicles, some of which are expected to be launched later this year.

(Reporting by Aradhana Aravindan; Editing by Anand Basu)