DEUTZ sells Chinese joint venture stake to partner FAW

German off-highway diesel engine manufacturer DEUTZ has sold its 50 per cent stake in DEUTZ Dalian, its Chinese joint venture, to joint venture partner First Automotive Works (FAW). The parties have agreed not to disclose any commercial details, and the transaction is subject to approval by the Chinese authorities. Despite ending the long-running joint venture, DEUTZ and FAW, will continue to collaborate on a basis of a customer-supplier relationship. DEUTZ can still procure engines for off-highway

October 22, 2018 Read time: 2 mins

DEUTZ sells stake in Chinese joint venture DDE.jpg

Dr Frank Hiller, chairman of DEUTZ management board, and Hu Hanjie, general manager of FAW Jiefang

German off-highway diesel engine manufacturer 617 DEUTZ has sold its 50 per cent stake in DEUTZ Dalian, its Chinese joint venture, to joint venture partner First Automotive Works (FAW). The parties have agreed not to disclose any commercial details, and the transaction is subject to approval by the Chinese authorities.

Despite ending the long-running joint venture, DEUTZ and FAW, will continue to collaborate on a basis of a customer-supplier relationship. DEUTZ can still procure engines for off-highway applications from FAW upon request. To this end, the two companies have reached an agreement to explore further possibilities for collaboration in future. The withdrawal from the DEUTZ Dalian joint venture is not expected to significantly impact on earnings this year.

“This step allows us to realign our Chinese activities. We are now reorganising our presence in China in order to generate stronger growth and be even more successful there. Talks on new alliances with major local partners in the construction equipment and agricultural machinery industries have already reached an advanced stage,” said chairman of the DEUTZ board of management, Dr Frank Hiller. The company plans to publish further details in the current year.

Chinese perspective on engine endeavours

The big drive to meet China Nonroad Stage IV emission standards is creating eye-catching competition among the world’s leading off-highway machine engine manufacturers, many of whom are benefiting from far more encouraging global trading conditions. Guy Woodford and Liam McLoughlin report.

It has been a good trading year for Cummins, the US global market off-highway diesel engine manufacturer. In Europe, the company’s key Darlington, North East England, assembly plant is currently producing 300 engines