Tata is taking steps to makes sure the little Nano won’t be short on power. FEV, a German engineering and powertrain firm, is right now actively working on the diesel engine for the Nano to debut later next year. The 800 cc, turbocharged CRDI engine would most likely be the tiniest engine with common rail technology in the world, taking the crown from Daimler.
The CRDI systems are being developed in conjunction with Bosch, while Honeywell Turbo India is working on the turbo charger. Originally the 700 cc CRDI engine, which Tata uses in its Ace mini-truck was considered for the Nano, but Tata has decided against it. The new FEV engine is cheaper and could also involve more progressive technology to battle emissions, redeem a better fuel economy, and achieve better engine refinement.