Cummins In Yet Another Joint Venture In China
In the latest move in its decades-long effort to expand its business in China, Cummins Inc. and Shaanxi Automobile Group Co. Ltd. have signed an agreement to form a 50/50 joint venture company, Xi'an Cummins Engine Co. (XCEC), to produce the Cummins ISM 11 L heavy-duty engine in Xi'an, the capital city of western China's Shaanxi Province.
The ISM is one of the flagship engines of Cummins heavy-duty product line and is available in ratings from 305 to 440 hp. It is targeted toward heavy-duty vehicles with gross vehicle weight between 26 and 44 tons, including trucks, long-distance coaches and double-decker buses.
The companies initially will invest $24 million into the joint venture company. Construction of the plant could begin as soon as the fourth quarter of 2005 and production could start as early as the third quarter of 2006, Cummins said. The market for heavy-duty trucks with payloads greater than 15 tons is expected to be around 200,000 units by 2010. The joint venture’s projected production is 50,000 units by 2010.
Shaanqi Group, headquartered in
Cummins has had a presence in the