GM/Fiat to exchange diesel engines
WARD'S AUTO WORLD STAFF Ward's AutoWorld, May 1, 2000 12:00 PM

The first impact of the General Motors Corp./Fiat SpA alliance is to be an exchange of diesel engines. GM's comparatively modern range of 4-cyl. diesels feature four valves per cylinder and direct injection but not common rail technology. Three Opel/Vauxhall diesels will be replaced within a year by more fuel-efficient Fiat common rail turbodiesels. At the top end, Fiat's 5-cyl. JTD, used in the Alfa 156 and various Fiat and Lancia models, is to be swapped for a new Isuzu Motor Corp. common rail V-6, which also is destined for Saab's 9-3 and 9-5, plus the front-drive replacement for the Omega. Fiat and GM currently produce 11 different gearboxes in Europe and Latin America, which will be reduced by the end of the year to seven. In Brazil, a GM pickup truck gets the badge-engineering treatment and emerges as a Fiat. Longer-term, engine and transmission development will effectively be merged. Opel/Vauxhall's all-new Corsa breaks cover later this year. Its successor will use a jointly developed, probably Fiat, platform to be shared with the next Punto, Palio and a future Seicento, plus the replacement for the just-released Agila. If this works as planned, the alliance is looking at sales volumes of more than 2 million units from common platforms a year, easily topping the Volkswagen AG A4 (Golf) platform's 1.3 million in 1999, as the world's highest-volume platform.

After months of arguing, Brazil and Argentina agree on new auto tariffs. But Mercosur trade pact smaller partners, Paraguay and Uruguay, are objecting to the new trade rules. The most substantial change in the new agreement dissolves the one-for-one rule by Jan. 1, 2006. The previous agreement allowed Brazilian automakers to export only as many vehicles to Argentina as Argentina exported to Brazil. The disparity between exports will now be limited to 6% this year, 22.2% in 2003, and all controls will be abolished by 2006. The deal fixes a 35% tariff on car imports and 25% tax on truck imports from outside the Mercosur region. Parts tariffs will be between 14% and 18%. Paraguay and Uruguay, which have almost no local auto industry and are reliant on imports, say they will not accept the new deal and want to continue importing vehicles with a lower tariff. Argentina and Brazil say lower tariffs would damage the integrity of Mercosur. Representatives will meet again this month in Montevideo, Uruguay, for another round of talks.