Corp. reaches a joint-venture agreement with Group, a deal where the Russian auto maker gains a 50.0% equity stake in diesel-engine designer and manufacturer VM Motori SpA.
The deal with a local partner strengthens GMâs position in Russiaâs diesel market among light-commercial vehicles and presents future opportunities for collaboration and export globally.
GM ranks as the largest non-Russian auto maker in the country. Marc Kempe, GMâs spokesman in the region, says the auto maker sees âconsiderable potentialâ for additional growth and continues to explore ways to increase its manufacturing capacity in Russia.
âHaving a strong partner with the ability to build diesel engines in the country is clearly a benefit,â he tells Wardâs.
Group obtains ownership in the Cento, Italy-based VM Motori from Corp. for an undisclosed amount.
GM bought its 50.0% share in the company last year from. Prior to that, VM Motori supplied diesel engines through a technology agreement with GM Daewoo Auto & Technology Inc. to the auto makerâs Opel brand in Europe over a 10-year period.
GM and VM Motori most recently collaborated on a new 2.9L turbocharged diesel engine for the Cadillac CTS, which the auto maker will launch in Europe next year. GM also will build VM Motori diesel engines in Thailand and Mercosur, according to another recent technology agreement.
âDiesel engines have a very important role in GMâs global advanced propulsion strategy,â says Mike Arcamone, vice president-GM Powertrain Europe. âWe are leveraging expertise and resources within our company and through technology partners like VM Motori to ensure we develop the worldâs best powertrains.
âOur joint venture agreement with GAZ Group provides business opportunities to expand our diesel engine business with new customers,â he says in a statement.
The agreement, which faces the scrutiny of European regulators, would allow GAZ Group to manufacture VM Motori engines under license in Russia for its lineup of light commercial vehicles, Gazelle and Maxus.
Local production also provides GAZ Group an opportunity to meet demand for light diesel engines from Russian manufacturers of road construction and agricultural equipment, according to the agreement.
âThrough localization of diesel-engine production, we will achieve the strategic goal of creating a full range of diesel engines to meet existing and future customer and environmental requirements for both Russian and global markets,â GAZ Group CEO Sergey Zanozin says.