General Motors has decided to concentrate its global diesel engineering activities here, despite its divorce from Fiat Auto.
Under the terms that ended GM and Fiat Autos five-year alliance, the Fiat-GM Powertrain joint venture based in Turin will be dissolved.
But GM will open a new global diesel development center in Turin employing about 150 people, mainly engineers.
In an internal memo, Thomas Stephens, the US-based group vice president of GM Powertrain, said: We will locate the GM Powertrain Europe headquarters and an engineering facility in the vicinity of Turin, Italy.
Several activities, including global diesel engine and control system work will be carried out in Turin, the memo said.
GM powertrain officials met with Turin city officials February 23 so GM could outline its plans for the center and to discuss a possible site for the venture.
About one-third of the E1.55 billion that GM agreed to pay to Fiat is related to sharing diesel engine technology and joint ownership of an engine plant in Poland.
According to the deal, GM will:
GM will create its global diesel engine engineering center in the area where the first direct-injection diesel passenger-car engine was designed for the Fiat Croma in 1986, and where common-rail, direct-injection diesel technology was created.
Since the introduction of common-rail diesel, the diesel share of new-car sales in Europe has grown from 24.8 percent in 1988 to 48.3 percent in 2004. Fiat group sold the patents for the breakthrough technology in 1993 to Robert Bosch for an undisclosed amount.
Diesel engines are expected to be in half of all new cars sold in Europe this year. By 2009, demand is expected to peak at up to 65 percent.