GAZ Group and General Motors Corp. Reach Joint Venture Agreement For Ownership of VM Motori

Cento, Italy – GAZ Group, one of Russia’s largest car manufacturers, and General Motors Corp., have reached agreement on a GAZ 50 percent equity ownership in VM Motori S.p.A., a designer and manufacturer of diesel engines based in Cento, Italy.

GAZ Group is acquiring the 50 percent equity stake of VM Motori, S.p.A., under a purchase agreement with Penske Corporation signed on August 27, 2008. This agreement is subject to clearance by the European Union Commission.

“This equity ownership agreement enables GAZ Group to access world-class diesel engine design and manufacturing,” said Sergey Zanozin, GAZ Group CEO. “It’s a highly promising investment opportunity, given the significant increase in demand for diesel engines in Russia and the positive business development of VM Motori globally.”

GM purchased its 50 percent equity share in VM Motori from Penske Corporation in 2007, after 10 years of collaboration with the company in supplying engines for its Opel brand products, in a technology agreement with GM Daewoo, and in joint development of a new 2.9-liter V-6 turbo diesel scheduled to launch in the Cadillac CTS in Europe in 2009, and in the most recent technology agreements for the manufacturing of VM Motori diesel engines in Thailand and Mercosur.

“Diesel engines have a very important role in GM's global advanced propulsion strategy,” said Mike Arcamone, vice president, GM Powertrain Europe. “We are leveraging expertise and resources within our company and through technology partners like VM Motori to ensure we develop the world’s best powertrains. Our joint venture agreement with GAZ Group provides business opportunities to expand our diesel engine business with new customers.”