So What is a VM Motori Anyway?

TDRadmin · Jul 30, 2013

[RAW]
What is a VM Motori?

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I’m glad to that you asked.  It has been months since the February 14th news of the Ram 1500 with a diesel engine.  Oddly, looking back at our Issue 80 coverage of the announcement (page 46), it appears that Chrysler was not yet ready to discuss the new diesel.  However, an internal memo from the previous month was somehow picked up by the Detroit Free Press, and the public relations guys were forced to break the news.
 
Now, six months later, the timing of the announcement really does not matter.  It is time to focus on the upcoming diesel product launch as we will soon see the V-6 VM Motori diesel engine in the 2014 Jeep Grand Cherokee as well as the 2014 Ram 1500.
 
What do we know about VM Motori and the V-6 that will be in the new 2014 Chrysler vehicles?  TDR writers Andy Mikonis and Greg Whale have both talked about the engine and a bit of VM history.  Mikonis gave us the quick rundown in Issue 80:
 
“The engine is sourced from VM Motori in Italy, a company currently owned 50/50 by Fiat and General Motors.  VM was founded in 1947, and Chrysler has used VM engines since the early 1990s, primarily four-cylinders for minivans and Jeep products in overseas markets.  You may also remember the 2005 – 2007 Jeep Liberty which was sold here; that was a VM engine.  Sales were discontinued because it did not meet the 2007.5 emissions standards.”
 
Mikonis’ briefing about VM Motori being owned 50/50 by Fiat and General Motors deserves further investigation.  Insight into VM’s ownership comes to us from the July 15, 2013 edition of Automotive News,   “Jeep Gets Bargain Diesel Thanks to GM Troubles.”  Quoting from Automotive News,
 
 “If buyers warm up to the new 3.0-liter V-6 turbodiesel engine available in the Jeep Grand Cherokee and Ram 1500 pickup, don’t be surprised if Chrysler-Fiat CEO Sergio Marcionne sends a case of Prosecco to General Motors CEO Dan Akerson.
 
“GM wrote the check that paid for the engine’s early development.  Here’s the story:  
 
“GM bought 50 percent of Italian engine maker VM Motori in July 2007.  Later that year GM announced it was working with VM Motori on a 2.9-liter diesel V-6 turbo engine for the European version of the Cadillac CTS to be launched in 2009.
 
“But then the wheels came loose on Cadillac’s European plans as sales failed to take off.  GM’s June 2009 bankruptcy complicated matters further.  VM continued developing the engine, but it was never used in a GM vehicle.
 
“Meanwhile, Fiat bought 50 percent of VM Motori in February 2011 – and there was a brand-new diesel V-6 turbo engine ready to go.  There have been some design changes, but the engine that was originally designed for Cadillac will get its first action competing against the company that conceived it.
 
“GM has not announced plans for a diesel for its light-duty trucks or SUVs, but it could also end up using the engine, since VM Motori is free to sell it to other customers.”
 
Next up, the July 22, 2013 edition of Automotive News has an interview with the President of VM North America, Raffaele De Vivo.  The following are excerpts from the Automotive News interview that was done by Automotive News staff reporter Larry Vellequette:
 
Chrysler is VM Motori’s biggest client and accounts for nearly 85 percent of its global sales.  VM Motori is owned 50 – 50 by Fiat and General Motors.
 
Q:  How many engines does VM Motori produce a year?  A:  This year, because of the Grand Cherokee in NAFTA, we will be around 86,000.  Last year, we did 55,000.  We are investing more than 80 million euro ($104 million) to increase our production capacity.  We are increasing our manufacturing capacity very much, but everything will be built in Italy.”
 
Q:  Are you running three shifts?  A:  We are running three shifts on the machining line, and two or three shifts on the assembly line. Q:  Where are you selling engines in Europe right now?  A:  We supply the London taxis on the automotive side.  Other than that, everything else is Chrysler.  We also have many other marine and industrial customers.
 
Q:  Why aren’t North American consumers as enamored with diesel as Europeans?  A:  I think for the American customer, the diesel memory is not as refined as we can provide in the diesel engine right now.  The Jeep Grand Cherokee with the V-6 diesel engine is state of the art and the NVH is very nice.
 
Q:  Does VM Motori have an exclusive contract with Chrysler, or can you sell engines to anybody?  A:  We can sell engines to anybody.  Of course, Chrysler is not only a customer; it’s also 50% of the ownership.  But I’ve never seen any stop on opportunities.
 
Q:  Who are VM’s main suppliers?  A:  Bosch is the main supplier for injection systems.  Honeywell for turbo – those are the main suppliers.  Our V-6 blocks are cast in Brazil.  The four-cylinder blocks are cast in Portugal.
 
Q:  How many engines could you build for Wrangler if you’re also building diesel engines for the Grand Cherokee and Ram 1500?  A:  That would be a different engine.  It would be the four cylinder for the Wrangler.  It’s a different assembly line.  We have an easy capacity for 4,000 engines per year, and today we build 10,000 four-cylinders.  We are a supplier that is not designed for high-volume production.  We are designed for lower-volume, so if we build one part number less than 60,000, that is our job where we are effective and good at.  If we have to build 500,000 engines the same, that’s not our job.  I don’t know that we’re the best supplier for that.
 
Q:  So what do you think holds back greater acceptance of diesel technology in the United States?  A:  I think No. 1 is fuel price.  At the end of the day in Europe, diesel is 10 to 20 percent cheaper than gasoline, always, winter or summer.  In the U.S. in the summer, diesel and gasoline are about the same, but in wintertime, diesel is 30 or 40 cents more per gallon.  But it’s also probably the culture.  Everyone in Europe has driven a diesel or had a diesel in his garage or his father’s or a friend’s.  But here it is different.  But I see that coming, mainly for trucks.  I think that the Ram 1500 diesel is a genius idea, and as many genius ideas go, it’s very simple.  It will be from those guys that the mentality will change.
 
To access the full-text article from Automotive News, click here:  <a href="http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130724/ANE/307269995/italian-diesel-maker-sees-big-opportunities-in-n-america#axzz2aYVf1WtA">http://europe.autonews.com/apps/pbcs.dll/article?AID=/20130724/ANE/307269995/italian-diesel-maker-sees-big-opportunities-in-n-america#axzz2aYVf1WtA</a>.
 
 
And now, for the Marketing 101 quiz:  What is the take-away from this interview?
 
For me it was Raffaele De Vivo’s final statement, “I think the Ram 1500 diesel is a genius idea, and as many genius ideas go, it is very simple.  It will be from those guys [truck owners] that the mentality will change.”
 
Let’s see if the mentality is ready for change!  To that point, continue on to watch the short videl from the folks at Chrysler/Ram about the new 1500 EcoDiesel .
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So What is a VM Motori Anyway?

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