Renault, AvtoVAZ May Delay Engine Launch

VIENNA – AvtoVAZ, Russia’s largest auto maker, may delay production of Renault's 1.6L 4-cyl. gasoline engines at its plant in Togliatti.

Original plans called for the Renault K4 engine to be launched first and the Nissan 1.6L 4-cyl. H4 powerplant to be added later as part of the 3-way joint venture between the companies.

But now the timing is in flux.

“Production is ready to start for the first engine, the 1.6L 16-valve Renault engine that we have today in the (Renault) Logan and the Sandero,” Bruno Ancelin, Renault senior vice president-Eurasia Region and managing director-Russia, tells WardsAuto.

The same is true for the manual gearbox Renault has localized at AvtoVAZ.

“The line is ready,” the Renault executive says. “Now we are just looking if we can start immediately or if we have to make some modifications in order to add the second engine, a 1.6L Nissan engine that we want to manufacture on the same line.”

Timing is entirely up to Renault and AvtoVAZ.

“We have the choice when to start, and, frankly speaking, it is an economical calculation,” Ancelin says. “Either we push the button now with the existing engine and produce for several months, then add the new one on the same line or we make the modifications immediately and continue to import the (Renault) engine for some time.”

The dilemma is a result of the economic crisis that is creating excess capacity in parts of Europe. Lower car production means lower engine output, so Renault now is under less pressure to launch the Russian engine line immediately.

“We have the choice now that we did not have several years ago when we decided the project,” Ancelin says.

“When we decided the project, we wanted to increase the capacity of this engine worldwide. But now, due to the decrease of volumes in Europe, we have the capacity elsewhere.”

That could make it more profitable to begin necessary modifications for the new engine now.

Currently, the main customer for the Renault engine is AvtoVAZ, which installs the 16-valve 4-cyl. in its Lada Largus wagon, the Russian version of the Logan MCV wagon. The engine accounts for only 7%-8% of installations in the Russian-made Logan and Sandero cars.

“Currently Renault in Russia (is) not the biggest customer for the new engine production line installed at AvtoVAZ,” Ancelin says. “However, we will be in the future.

For now, though, “the major factor regarding the time to start the production is AvtoVAZ.”

Ancelin would not speculate on when production is likely to get under way.