Deutz AG Announces China Venture

Posted on December 18, 2006

Deutz AG, Cologne Germany, announced a joint venture with FAW Jiefang Automotive Co., Ltd. based in Changchun, China, to manufacture and sell diesel engines under the name Deutz (Dalian) Engine Co., Ltd. The joint venture is a development of existing cooperation between the two companies, which will each own 50% stake in the new company based in the port city of Dalian, located in the northeast of China.

Deutz declared that it will invest the equivalent of $78 million in the new company and will assume its industrial leadership. FAW will contribute to the joint venture its new plant that manufactures licensed Deutz engines.

According to Deutz the initial annual capacity for 2007 will be of 50,000 engines, which could eventually be increased to 100,000. The plant will manufacture engines with a capacity between 4 and 7 litres for industrial applications and commercial vehicles and they will be mainly sold to international Deutz customers in Asia and to the FAW group.

Deutz underlined that the new site at Dalian will represent Deutz' largest production facility after Cologne, expressing the company's strategy for internationalization and growth.