Deutz consolidating operations in China

Deutz and AB Volvo have determined not to proceed with their proposed joint venture in China due to the weak market situation in the region.

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DEUTZ AG announces that it has agreed with its partner AB Volvo not to proceed with their proposed DEUTZ Engine (China) Co., Ltd. (DEC) joint venture. When it reported its most recent quarterly financial results back in November 2014, DEUTZ announced that both companies would be conducting a strategic reassessment of this joint venture. Having completed a thorough and comprehensive review, they have now agreed
that this production company should be wound up given the weak prevailing market situation in China. The joint venture has not yet made any substantial investments.

Nonetheless, DEUTZ 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," explains Dr. Helmut Leube, Chairman of the Board of Management of DEUTZ AG.

Since 2007, DEUTZ and the First Automotive Works (FAW) Group, one of China's leading vehicle manufacturers, have been running the DEUTZ (Dalian) Engine Co., Ltd. joint venture in Dalian, China, where 3 to 8 liter diesel engines are manufactured – primarily for the Chinese market.