Fiat and GM untangle their powertrain operations.(News)(Brief Article)

Byline: Luca Ciferri

General Motors has walked away from its five years as Fiat Auto's powertrain partner with something it badly needed: a 1.3-liter common-rail diesel engine.

"Without this engine, GM would have completely missed out'' on Europe's surge in demand for diesel-powered small cars, said Philippe Houchois, head of auto research at JPMorgan Chase in London.

In 2000, only 10 percent of GM sales in Europe were diesel-powered vehicles. By 2004, that figure had increased to 46 percent. About 60 percent of the 740,000 diesels GM expects to sell in Europe this year came from the powertrain joint venture with Fiat.

GM says that …