10.3.2004
GM Daewoo and VM Motori sign long-term diesel agreement

GM Daewoo has signed an agreement with Italian diesel engine maker VM Motori to manufacture a series of 1.5 and 2.0-liter diesel engines. They will be built at a new diesel engine plant alongside GM Daewoo's auto-making facility in Kunsan, South Korea.

According to Nick Reilly, president and CEO of GM Daewoo, total investment including engineering development for the new engine will be close to 475 billion Korean Won (over 320 million euros) over the life of the program.

Production of the new engines is due to begin in early 2006 with annual capacity expected to reach 250,000 units. The diesel engines produced at the 19,200-square-meter facility will power a full range of GM Daewoo vehicles, the first of which will be a new compact-class SUV. The engines will be tuned to optimize the unique characteristics and requirements of each vehicle. They will feature common-rail technology and meet the Euro IV emission standard. Selected applications, including the new SUV, will feature a diesel particulate filter.

" With their growing popularity around the world, diesel vehicles will play a key role in our future growth," said president and CEO Nick Reilly. "By leveraging VM Motori's expertise and the expertise of GM Powertrain to develop additional features and key components, we expect to produce diesels that are among the best and the most efficient and that provide the highest value in the industry."

According to Roger Penske, Chairman of the Board of VM Motori, "We are extremely proud to join the GM Daewoo team. As a company with a long history of developing and producing diesel engines, we at VM Motori look forward to helping GM Daewoo continue to grow by satisfying the increasing demand for high quality, environmentally friendly diesels around the world."

Construction of the engine plant is due to begin in June 2004 and finish in April 2005. GM Daewoo will hire over 250 new employees to staff the engine plant. The plant's machine line will be 90 percent automated and its engine assembly line 40 percent automated. The entire plant will be flexible in order to accommodate future engine products.

GM Daewoo Auto & Technology Co., which is based in Incheon, Korea, was established in 2002. It has three manufacturing facilities in Korea as well as an assembly facility in Vietnam. GM Daewoo products also are assembled at GM facilities in China, Thailand and India. In 2003, GM Daewoo sold 571,219 vehicles and exported its products to more than 120 countries. In Europe, GM Daewoo sold 133,000 cars in 2003, an increase of 21.6% over the previous year.

VM Motori was founded in 1947 and is located at Cento, Italy. Initially its products were targeted toward the industrial, agricultural and marine industries. Today, the company specializes in the design and production of diesel engines for a variety of uses. With thedevelopment of a new range of state of the art, turbocharged diesel engines in the mid-seventies, VM Motori established itself as a key player in the automotive sector.