Fiat
Powertrain Technologies (FPT) has confirmed that it has
just bought a 50 percent stake in Italian diesel engine
manufacturer VM Motori which provides a curious symmetry
with the Italian firm's recent history as it turns its
new acquisition into a joint venture between Fiat and
its former joint venture partner GM. The news that FPT
was to buy the half stake belonging to the U.S.'s Penske
Corporation was revealed mid-January and confirmed in a
statement issued in Turin today.
Penske originally
bought a 51 per cent stake in VM Motori in 2003 from
DaimlerChrysler, before completing the purchase of the
remaining 49 per cent in 2007. Subsequently that same
year, it sold half of the company to General Motors. Russia’s GAZ Group announced plans to purchase Penske’s
remaining stake in September 2008, as a complement to
their purchase of Britain’s LDV. The intention was to
install VM engines in their own GAZelle van and LDV’s
Maxus – but the deal fell over in February 2009, a
combination of the effects of the global financial
crisis and LDV’s abortive relaunch.
Fiat
wants the stake to get great control over VM's RA 630 3.0 V6, which will
find its first OEM installations in European versions of
the new Jeep Grand Cherokee and the Chrysler 300, which
will wear a Lancia badge in Europe. VM launched
this engine a few years ago but has found it hard to
generate any interest, however it has recently been
updated to Euro 5 specification and had around 20 kg
shaved off its weight. It won't be Fiat’s
first encounter with the 630 – prototypes of the Alfa
159 with this engine were tested some years ago, but the
car’s failure to set the sales charts alight led to
management questioning whether such an installation
would prove profitable. In the new 300 and Grand
Cherokee, it will serve as a replacement for
Mercedes-Benz’s OM642 3.0 V6, the diesel option for the
previous 300 and Grand Cherokee – a carryover from
Chrysler’s time under Daimler ownership.
This
is the latest in a series of strategic engine
manufacturing acquisitions where Fiat and its partner
Chrysler have acquired somewhat unregarded engines.
Chrysler bought out its partners in the World Gasoline
Engine (WGE) project, formerly a joint venture between
Chrysler (then under Daimler ownership), Mitsubishi and
Hyundai, the actual unit based on a powerplant from the
Korean firm; however the engine quickly developed a
reputation for being noisy and unresponsive. Another
flop was the Brazilian-built Tritec engine, originally a
joint venture between Chrysler and Rover (and then BMW),
but with all partners dissatisfied with the engine's
abilities it was acquired by FPT and reworked to become
the new E.torQ engine. VM's 630 has similarly been cold
shouldered by OEMs and FPT will be hoping that its stake
in VM will allow it to have a greater influence over the
development of the engine.
FPT announced the acquisition of the Penske stake in a
statement issued in Turin today which read: "Fiat
Powertrain, a subsidiary of Fiat S.p.A, and Penske
Corporation have reached an agreement under which Fiat
Powertrain will purchase Penske Corporation’s
fifty-percent stake in VM Motori S.p.A. (VM). The
agreement is still subject to customary clearance by the
appropriate anti-trust competition authorities. VM is a
long-established company, headquartered in Cento
(Italy), specialized in the design and manufacturing of
diesel engines with its own intellectual property. As a
consequence of the deal, VM Motori will be co-owned by
Fiat Powertrain and GM (which acquired its fifty-percent
stake in the company in September 2007). GM and Fiat
Powertrain will jointly manage VM, while both
shareholders will continue to have ongoing commercial
relationships with VM, including engineering services
and supply of diesel engines. Existing business
relationships between VM Motori and GM as well as other
customers, remain unaffected. Through this acquisition
Fiat is further enlarging its diesel engines portfolio
with state of the art products for different
applications and particularly for automotive, such as
the newly developed V6 engine."
