Renault will build a new 1.4-litre petrol engine, its first in a partnership with Nissan, at its Valladolid factory in northern Spain.

As just-auto reported, the plant’s future was last December described by a union official as uncertain with “very bleak prospects” after Modus car output was cut 100 units to 380 a day.

“The group renews its confidence in this factory” a Renault Spain spokeswoman told Agence France-Presse (AFP).

The new TCe 130 would be the first to be produced in alliance with Nissan, 44% owned by Renault, and used in the French automaker’s [recently redesigned] Megane range, the company said.

The news agency noted that Renault recently announced it was axing 400 temporary jobs at its Palencia plant in northern Spain, part of a programme of production cuts in the country expected to affect more than 10,000 workers between January and May.

The decision to produce the TCe 130 engine in Spain would mean “less need to impose” the cutbacks, the spokeswoman told AFP.

Renault union members took to the streets of Valladolid last December to protest the automaker’s delay in assigning any new vehicles to the plant and the “lack of clarity for the factory’s future”.

The plant was affected in recent years by volumes of its key vehicle – the B-segment Modus MPV – never reaching the optimistic sales targets initially set for it. Renault later updated the model line and introduced a more spacious, stretched version in a bid to spur sales.