The Financial Times reports that GM is considering a plan to extend its alliance with Russian carmaker AvtoVAZ to the manufacture of engines. Under the reported plans an engine plant would be built alonsgide their existing joint venture in Togliatti.

The FT report says that the plan involves an investment of $1 billion and the production of 200,000 engines a year to supply the joint venture Chevrolet Niva SUV as well as some of AvtoVAZ’s own models.

However, the FT report warns that the investment has not yet been confirmed and that a decision will be made next year.

The first Chevrolet Niva rolled off the assembly line at the new GM-AvtoVAZ joint venture plant at the end of last month.

For the first full year of production, the GM-AvtoVAZ JV plans to produce 35,000 Chevrolet Nivas. By 2005, production is expected to reach 75,000 units. The Niva will be sold in Russia from later this year, with exports to Europe, the Middle East, Asia and Latin America planned to begin in October 2003.