DEUTZ consolidate operations in China

Proposed joint venture with Volvo wound up as company focuses on Dalian joint venture with FAW Group

DEUTZ AG and AB Volvo have decided not to proceed with their proposed Deutz Engine (China) Co Ltd. (DEC) joint venture, given the weak prevailing market situation in China.

Having completed a thorough and comprehensive strategic reassessment of the joint venture, both companies agreed that this production company should be wound up. The joint venture has not made any substantial investments to date.

Despite this move, Deutz say they are still convinced of the Chinese market’s long-term potential and that it remains their stated objective to use Chinese production facilities to meet local demand from AB Volvo and other target customers.

‘To this end, we will be focusing on our Deutz Dalian Engine Co., Ltd. (DDE) joint venture,’ said Deutz AG chairman Dr Helmut Leube.

Since 2007, Deutz and the First Automotive Works (FAW) Group, one of China’s leading vehicle manufacturers, have been running the DDE joint venture in Dalian, China, where three- to eight-litre diesel engines are manufactured – primarily for the Chinese market.