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GM Daewoo Starts Construction Of New Diesel Engine Plant


* Total investment of over ?200 million
* Newly developed family of 1.5 and 2.0-litre diesel engines
* Korean manufacture for worldwide export

GM Daewoo Auto & Technology Ltd (GM Daewoo) has started construction of its new diesel engine plant in Gunsan, Korea. Total investment in the diesel programme, including engineering development, will be close to 475 billion Korean won (c ?213 million). The 19,200-sq.m facility, which is adjacent to GM Daewoo?s vehicle manufacturing facility in Gunsan, will produce a new family of Euro IV-compliant 1.5-litre and 2.0-litre diesel engines. The engines will power a range of vehicles to be sold in both the domestic Korean market and export regions including Europe.

The production facility?s machine line will be 90 per cent automated and the engine assembly line 40 percent automated. The entire plant will be designed for flexibility in order to accommodate future engine products. It will have more than 250 employees. Construction of the plant is expected to be completed in April 2005, with production commencing in early 2006. The annual manufacturing capacity will exceed 250,000 units.

GM Daewoo President and CEO Nick Reilly said: "The new plant will make GM Daewoo a stronger competitor by giving us an important new source of diesel engines that are in high demand the world over. By leveraging the expertise of VM Motori and GM Powertrain, we will produce diesel engines that provide the highest value and efficiency in the industry."

In March, GM Daewoo signed a licence agreement with Italian diesel maker, VM Motori, to develop the new engines. They will be tuned to optimise the unique characteristics and requirements of each vehicle. The engines will feature common-rail technology and meet the Euro IV emission standard. Selected applications, including a new, compact-class SUV, will feature a diesel particulate filter.

GM Daewoo Auto & Technology, 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 are also assembled at GM facilities in China, Thailand and India. In 2003, GM Daewoo sold nearly 600,000 vehicles. Its products are exported to 141 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. The company specialises in the design and production of diesel engines for a variety of uses. With the development 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.