OREANDA-NEWS. Severstal-avto and Fiat Powertrain Technologies have signed a memorandum on intentions to set up a joint venture in Russia to produce F1A diesel engines.

According to a Severstal-avto press service report, the project will be implemented based on the Zavolzhsky Engine Plant. The project to make diesel engines will seek industrial assembly status.

The bulk of produced engines will be mounted on Fiat Ducato cars whose production Severstal-avto is going to launch in 2007 based at the Alabuga (Tatarstan) free economic zone.

Consequently, the joint venture between Severstal-avto and Fiat will become the first project in the Russian car industry when engines will be produced domestically for the vehicles assembled in Russia. In addition, the diesel engines will be also installed on UAZ Patriot jeeps.

Severstal-avto General Manager Vadim Shvetsov noted that production of engines in Russia will enhance competitiveness of Fiat Ducato on the market. In addition, the project will also raise the competitiveness of UAZ Patriot jeeps due to modern and economical engines.