Renault to Launch Engine Production in India with Nissan

The Renault-Nissan alliance plans to begin making small gasoline engines in India in about a year, The Wall Street Journal reports.

Adding local engine production will enable the partners to avoid India's 60% import duty on foreign-made powerplants.

The engines will be used to power new lines of low-priced vehicles being introduced by both companies in emerging markets, according to the Journal.

Renault says the new budget-priced car it is developing will join the company's lineup in India in 2015 at a price between €2,300 and €5,100.

Nissan plans to begin selling the first model of its revived Datsun brand a €2,300-€3,900 five-door hatchback early next year in India, Indonesia, Russia and South Africa.

The new vehicles will be produced at the factory operated by the two companies outside Chennai. Capacity there will expand by one-third to 480,000 this autumn. The complex already assembles the Renault Duster SUV, Pulse small car and Scala midsize sedan and the Nissan Micra and Sunny small cars.