Deutz Ends Chinese JV

Deutz AG has sold its 50% stake in its Deutz Dalian (DDE) joint venture with First Automotive Works (FAW) in China to FAW. The move follows approval from the supervisory board and agreement on the necessary contracts. Deutz had said in July it intended to withdraw from the venture. The parties have agreed not to disclose any commercial details. The transaction is subject to approval by the Chinese authorities.

Despite ending the joint venture, Deutz said it will continue to collaborate with FAW on a  customer-supplier basis, and Deutz will still be able to procure engines for off-highway applications from FAW upon request.

Over the course of the joint venture, DDE produced licensed Deutz engines in the 4 to 8 L range from the 1013, 2012 and 2013 Deutz engine families for use in the local on-highway and off-highway markets.

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, Deutz said.

 “This step allows us to realign our Chinese activities. We are now reorganizing 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,” says chairman of the Deutz Board of Management, Dr. Frank Hiller. Hiller said further details may be announced later this year.

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