When Tata launched the Nano last year it was only available with a two-cylinder gasoline engine. The manufacturer has promised additional variants, though, including what would be the world's smallest automotive diesel. Tata has been collaborating with supplier Robert Bosch on the development of that diesel engine along with numerous other subsystems of the Nano, i.e., the brake system.
If a report out of India is accurate, the Nano diesel will be a single cylinder unit displacing approximately 550-650 cubic centimeters. That would make it considerably smaller than even the 800 cc three cylinder in the Smart Fortwo CDi. The output would only be 25-30 horsepower, but the extra torque of such an engine should still yield reasonable performance in a car this size. The engine uses Bosch's common-rail injection technology, although the rail as such is unnecessary with only one cylinder. It's not known at this time if the engine will use a solenoid or piezo-electric injector or what kind of mileage it will get.
[Source: Businsess Standard Motoring]
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