Gazeta Mercantil reports that foundry Fundicao Tupy, of Joinville (Sao Paulo state), has signed a contract with Audi to supply a total 250,000 engine blocks to be used in a new family of 2.5 litre, 220 horsepower motors that will be placed in the company’s A4 and A6 model lines. The deal totals 40 million euros (US$37.6 million), and shipments start in 2004.

The newspaper report says that the deal will consolidate Tupy’s position as world leader in supplying engine blocks of vermicular iron, a new alloy known in the automotive market as CGI – compacted graphite iron.

Tupy competed with three German foundries for the Audi contract: Frintz Winter, Halberg Guss and Eisenwerk Bruhl.

This is the second contract for engine blocks of this type material. The first, part of Project Lion, was signed recently with the American automaker Ford Motor – to supply 2.7-liter motors for Jaguar, Land Rover and Mondeo – involving a value of US$210 million distributed over ten years.