Russian-Made PSA Engine Under Hood of Next Chevrolet Niva

VIENNA – The second-generation Chevrolet Niva small cross/utility vehicle will be powered by a Russian-built PSA Peugeot Citroen engine.

The Niva is produced by the GM-AvtoVAZ joint venture in Togliatti, Russia, with the revamped model scheduled to begin volume output in late 2015.

Interestingly, the project was not announced by GM-AvtoVAZ but by the administration of the Special Economic Zone in Togliatti, which will house the new engine plant.

The plan is unusual in that production of the engines will be outsourced to AZ Powertrain, a JV between the Russian supplier Zavod Vysokotochnykh Detaley and Indian company Avtec.

Avtec, which belongs to India’s CK Birla Group, manufactures a wide range of products including engines, transmissions and precision-engineered components.

The PSA engine earmarked for Togliatti and the next-generation Chevrolet Niva is a 136-hp 1.8L 4-cyl. gasoline powerplant codenamed EC8. EC engines are an evolution of PSA’s TU engine family.

The current Chevrolet Niva is powered by a 1.7L gasoline engine sourced from AvtoVAZ, GM-AvtoVAZ’s 50% shareholder.

The new plant’s initial annual capacity will be for 84,000 engines, with employment planned at 160 workers. Construction is to start in spring 2014, with production launching in 2015, Alexey Nesterenko, managing director of AZ Powertrain, tells the Russian business daily Vedomosti.

Nesterenko says the investment will be $31.5 million, with most of the money coming from India.

For now, the plant only will assemble the engines, but machining could be added after 2020, Nesterenko is quoted as saying.

Local content will be about 15% in the first phase and is expected to grow to 60% by 2020. Some parts are to be sourced from India and China.

With the locally made PSA engine, GM is fulfilling one of the Russian government’s New Decree 166 targets that call for at least 30% of vehicles built in Russia to be equipped with locally manufactured engines as of 2016.

In related news, Gary Alan Tilson, aftersales director at GM International Operations, is appointed the new managing director of GM-AvtoVAZ.

He has been with GM for 29 years, holding positions in the U.S., GM China, the Shanghai General Motors JV and GMIO. He has worked in supply chain, logistics, warehousing and distribution and manufacturing.

Tilson replaces Jeffrey Glover, who is repatriating back to Germany to support Adam Opel in Russelsheim as director-Project Accelerate Opel/Vauxhall.