In an effort to further GM's plan of becoming one of the dominant automakers offering diesel-powered vehicles, the company announced plans to purchase a 50-percent stake in VM Motori S.p.A., an Italian diesel engine manufacturer owned by Penske.

The deal comes hot on the heels of Bob Lutz's comments last week about the expansion of GM's diesel lineup, allowing the company to grow its oil-burning offerings in expanding markets in China and India, while gaining a stronger foothold on the diesel market in Europe.

Look for the ink to dry sometime later this year.

GM's press release is posted after the jump.

[Source: General Motors]


PRESS RELEASE

GM Will Buy 50 Percent Equity Interest in VM Motori

Investment builds on GM's commitment to diesel engine technology

DETROIT – General Motors Corp. announced today it has reached a joint venture agreement with Penske Corporation to purchase 50-percent equity of VM Motori S.p.A, a designer and manufacturer of diesel engines based in Cento, Italy.

This investment builds on GM's existing relationship with VM Motori, GM's diesel expertise worldwide, and its strong relationship with Isuzu.

"Diesel engines have a very important role in GM's global advanced propulsion strategy," said Tom Stephens, group vice president, GM Global Powertrain and Quality. "We are leveraging expertise and resources within our company and through technology partners to ensure we develop the world's best powertrains."

GM announced at the Geneva Motor Show that it will jointly develop a new 2.9-liter V-6 turbo diesel engine with VM Motori that is scheduled to launch in the Cadillac CTS in Europe in 2009. GM Powertrain Europe will focus on the development of the first industry application of a clean combustion process called closed-loop combustion control, electronic engine control and exhaust-gas aftertreatment, as well as calibration and integration into GM vehicles. VM Motori plans to build the new unit at its plant in Cento, Italy, and is responsible for the mechanical aspects of the engine's design, development and testing.

Penske Corporation, based in Bloomfield, Mich., is a transportation services company that encompasses retail automotive sales and services, truck leasing, supply chain logistics management, transportation components manufacturing, and high-performance racing.

VM Motori, founded in 1947, specializes in engine design and production for a variety of uses, including light commercial vehicles.

GM currently offers 17 diesel engine variants in 45 vehicle lines around the world. GM sells more than one million diesel engines annually, with products that offer a range of choices from the 1.3L four-cylinder diesel engine sold in the Opel Agila and Corsa, up to the 6.6L V-8 Duramax diesel sold in full-size vans, heavy duty pickups and medium duty trucks in the U.S.