GM Daewoo Auto & Technology has started construction of its new diesel engine plant in Gunsan, South Korea.

Total investment in the diesel programme, including engineering development, will be around 475 billion won (about £213 million). The 19,200-sq.m facility, which is adjacent to GM Daewoo’s vehicle manufacturing plant, will produce a new family of Euro IV-compliant 1.5-litre and 2.0-litre diesel engines. The engines will power a range of vehicles to be sold in both the domestic Korean market and export regions including Europe.

The production facility’s machine line will be 90% automated and the engine assembly line 40% automated. The entire plant will be designed for flexibility in order to accommodate future engine products and will have more than 250 employees.

Construction of the plant is expected to be completed in April 2005, with production commencing in early 2006. The annual manufacturing capacity will exceed 250,000 units.

GM Daewoo president and CEO Nick Reilly said: “The new plant will make GM Daewoo a stronger competitor by giving us an important new source of diesel engines that are in high demand the world over. By leveraging the expertise of VM Motori and GM Powertrain, we will produce diesel engines that provide the highest value and efficiency in the industry.”

In March, GM Daewoo signed a licence agreement with Italian diesel maker, VM Motori, to develop the new engines. They will be tuned to suit the unique characteristics and requirements of each vehicle. The engines will feature common-rail technology. Some applications, including a new, compact SUV, will feature a diesel particulate filter.