Fiat to take control of VM Motori, buy GM stake

Mumbai, September 23, 2013: Fiat SpA has said its plans to take full control of the diesel engine manufacturer VM Motori by buying out the half of the company owned by joint venture partner General Motors.

According to a Reuters report, VM Motori, which is based in north Italy and a 50:50 joint venture between Fiat and GM, supplies engines for various car models, including the Jeep Wrangler and Jeep Grand Cherokee. These will be the first Chrysler products to be launched in India.

According to a Fiat statement quoted in the Reuters report, "GM's notification to exercise its put option to sell to Fiat its 50 percent interest in VM Motori SpA is in line with the contracts Fiat entered into when it acquired a 50 percent stake in VM in 2010,".

Meanwhile, Fiat India is gearing up to launch the Grand Jeep Cherokee and Wrangler sometime around Diwali this year.

VM Motori representatives visited India over 18 months ago and are believed to have met a number of OE manufacturers in India to finalise deals.

Fiat bought a 50 percent share of VM Motori in February 2011 from Penske Corporation of the US, and has announced it would manage the company jointly with General Motors. While Maruti Suzuki’s diesel engines are licensed from Fiat which also supplies to Tata Motors under its Indian collaboration with the carmaker, VM Motori’s diesel engines were larger than those produced by Fiat.