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GM purchases half of Italian diesel maker VM Motori

by Andrew Ganz

General Motors has purchased 50 percent of VM Motori from Penske Corp., who will continue to own the other half of the Italian diesel manufacturer. According to Bob Lutz, GM is planning to use VM Motori's all-new 2.9 liter V6 diesel engine in European versions of the Cadillac CTS in 2009 with North American sales shortly thereafter.

The move provides GM with a firm grip on the world diesel market. Previously, GM had used VM Motori for diesel engines in the European Opel/Vauxhall Frontera SUV, which was essentially a re-badged Isuzu Rodeo.

Until recently, DaimlerChrysler had a 49 percent share of VM Motori; Penske bought that back earlier this year and sold it, as well as an additional 1 percent, to GM. DaimlerChrysler's interest in VM Motori had been in diesel engines for the Jeep Liberty/Cherokee SUV.

GM is expecting a significant world-wide growth in emissions-friendly diesel engines. In the early part of the decade, GM partnered with Fiat Auto to create diesel engines. Despite the demise of various GM-Fiat alliances, GM was able to retain half-intellectual property of 1.3 and 1.9-liter engines and half of a Polish plant, which produces the 1.3-liter diesels.

GM's share in VM Motori will provide access to - and development of - larger diesels aimed at the North American, Chinese, Indian and Russian markets.

VM Motori is based in Cento, Italy, in the Reggio Emilia region - also home to Ferrari and Maserati, among others. Among other diesels, VM produces the engines for London-style taxicabs.