New Delhi: The country's largest car maker Maruti Suzuki India on Saturday said it will invest Rs 2,600 crore to set up a new diesel plant at its Gurgaon facility and to expand R&D activities at Rohtak by 2014.

The company's Board of Directors, in a meeting held on Saturday, approved setting up of a diesel plant in Gurgaon at an investment of Rs 1,700 crore. It also allowed the company to ramp up investment by Rs 900 crore at its upcoming R&D centre in Rohtak.

"We are going to invest Rs 1,700 crore to set up the diesel plant, which will be constructed inside our Gurgaon manufacturing facility. This will be a brand new unit and will be owned by the company," Maruti Suzuki India (MSI) Chairman R C Bhargava told reporters here.

Talking about its upcoming R&D centre in Rohtak, Bhargava said: "The board has also approved an additional investment of Rs 900 crore to set up various facilities, including testing for emission and safety. This will be over and above the Rs 1,500 crore earlier announced to set up the test track."

The company will build the plant in phases and will start operations by mid-2013 with an initial capacity of 1.5 lakh units a year, he added.

"In the first phase, we will invest Rs 950 crore. After that, we will double the capacity to three lakh units per year by 2014 and it will entail a total investment of Rs 1,700 crore," Bhargava said.

The company, which is sourcing diesel engines from Suzuki Powertrain India Ltd (SPIL) and Fiat India, had put on hold investments on the plant awaiting clarity over any additional taxes on diesel vehicles in the Budget.