Nissan Motor Co. plans to start providing core car engines to French automaker Renault SA this summer, Nissan officials said here Wednesday.
Renault SA has a 36.8 percent stake in the Japanese automaker.
The move is part of the firm's major restructuring plan under the leadership of Nissan President Carlos Ghosn, who was dispatched to Nissan by Renault.
It will be the first time the two companies have embarked on the mutual use of engines, a move they hope will improve engine production efficiency, the Nissan officials said.
Under the scheme, which is to begin around August, Nissan will provide Renault with engines featuring displacements of 3,000cc to 3,500cc, they said.
The engines are made at Nissan's plant in Fukushima Prefecture.
While Renault currently buys engines of this size from PSA Peugeot Citroen of France, it will likely shift to Nissan, the officials said.
For its part, Nissan will probably procure engines featuring displacement of 1,200cc to 2,000cc from Renault in the future, they added.
Nissan plans to use the 3,000cc to 3,500cc engines produced in Fukushima in its new Altima sedan, due to be released in North America in September.
It will initially import the engines from Japan, but plans to produce them locally at its plant in Tennessee beginning next June.
The annual engine production capacity of the plant will probably increase to 750,000 units from the current 200,000 during the 2004 business year, the officials said.