Renault has decided to expand diesel-engine-making capacity at a new factory in Turkey that could begin operation in two years, a senior company executive told Dow Jones.
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Renault has decided it needs to expand production of 1.5-litre diesel engines [used in a variety of European and UK-made Renault and Nissan models], which it currently manufactures in Spain, by building a new factory outside of western Europe, Kazumasa Katoh, senior vice president in charge of Renault’s powertrain engineering, told the news agency. Currently, Renault builds about 900,000 of the 1.5-litre engines a year.
Separately, Katoh, speaking to Doe Jones ahead of the Paris motor show, said Renault and its alliance partner Nissan Motor are studying the potential impact of rival Honda’s (HMC) announcement that it will offer a clean diesel engine in US models by 2009. Renault provides small diesel engines to Nissan under the two companies’ seven year old cross shareholding alliance, the report noted.
Honda’s announcement that it had designed a diesel engine clean enough to sell in all 50 US states “had a big impact,” Katoh reportedly said. But he cautioned “we need to know the U.S. customer’s reaction” to the higher cost of diesel engines.
Dow Jones said Katoh expressed confidence Renault can design a diesel engine clean enough to sell in the US [from which it withdrew in the 1990s after a long-running alliance with American Motors, since absorbed into DaimlerChrysler], where clean-air rules are tougher on diesel emissions than European clean-air rules. Diesel technology is increasingly dominant in the European market.
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By GlobalDataKatoh reportedly said he agrees with projections from major oil companies that oil prices will continue to fall over the next four to nine years to around $US30-$40 a barrel. But he predicted car makers will still have an incentive to explore alternatives to conventional petrol-engine technology, as governments continue pressure to reduce CO2 emissions and dependence on imported oil.
Katoh told Dow Jones that, from Renault-Nissan’s point of view, it isn’t clear which technologies for reducing oil consumption will be long-term winners. But he expressed doubts that the kind of hybrid petrol-electric technology which powers Toyota’s Prius will be dominant, given its high costs.
“We know even at Toyota they are developing diesel. Which is better in terms of company profit or the environment, that’s not concluded,” he told the news agency.
