Deutz halts joint venture in China

Deutz AG has announced that it has agreed with its partner AB Volvo not to proceed with the proposed Deutz Engine (China) Co., Ltd. (DEC) joint venture.   When it reported its most recent quarterly financial results in November 2014, Deutz announced that both companies would be conducting a strategic reassessment of the joint venture.

Having completed the review, the two companies have now agreed that this production company should not go forward, especially given the weaker market conditions in China. The joint venture has not yet made any substantial investments, Deutz said.

Nonetheless, Deutz said it is still convinced of the Chinese market's long-term potential. "It remains our stated objective to use Chinese production facilities in order to meet local demand from AB Volvo and other target customers and, to this end, we will be focusing on our Deutz Dalian Engine Co., Ltd. (DDE) joint venture," explained Dr. Helmut Leube, chairman of the Board of Management of Deutz AG.

Since 2007, Deutz and the First Automotive Works (FAW) Group have been running the Deutz (Dalian) Engine Co., Ltd. joint venture in Dalian, China, where 3- to 8-L diesel engines are manufactured, primarily for the Chinese market. (Source: Diesel Progress Online)