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Fiat buying 2nd half of diesel supplier VM (corrected)

by David Zatz on

VM 3.0 V6 Ecodiesel diesel engine

Fiat announced over the weekend that it was buying General Motors’ half of VM Motori (Vancini-Martelli Motori). The transaction is expected to be finalized by the end of calendar-year 2013.

In 2011, Fiat acquired half of VM from Penske, which had purchased VM from DaimlerChrysler; Penske sold the other half to General Motors.  DaimlerChrysler itself had acquired VM from Detroit Diesel in 2000.

VM has supplied European Jeeps and Chryslers with four and five cylinder diesel engines; the company currently also supplies the advanced 3-liter V6 diesel used by the Grand Cherokee and Ram 1500. VM has generally specialized in four and six cylinder engines.

Fiat-aligned Iveco co-developed 5.9 and 6.7 liter six cylinder engines (the same size currently used by the Ram 2500 through 5500), but it is unlikely that Ram will switch from the Cummins to the equivalent Iveco engines. Many buyers choose Rams specifically to get the Cummins diesel. However, the deal might make additional options available for Ram and for other Chrysler products. For the moment, it is most likely that Fiat is pursuing the deal partly for exclusive rights to certain products, partly for economic reasons (to fully tap into VM’s profits), and partly for technology sharing; it is possible that Fiat could also produce some VM-designed engines to expand their availability if the public reaction to new diesel-powered Chrysler products is favorable.

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