Cummins, LiuGong Form Joint Venture for Engine Production

October 20, 2011

Cummins Inc. and Guangxi LiuGong Machinery Co. Ltd. announced today a joint-venture partnership to manufacture MidRange engines at a facility to be built in Liuzhou City, Guangxi Province, in southern China. The new joint-venture operation, titled Guangxi Cummins Industrial Power Co. Ltd., will commence engine production in 2013. Volume is planned to reach 50,000 units with the capability to expand in the future.

The agreement was signed in Liuzhou City by Wang Xiaohua, chairman, Guangxi LiuGong Machinery Co. Ltd., and Steve Chapman, group vice president of Cummins and chairman of Cummins China. The engines will be based on Cummins MidRange engine family meeting Tier 2 and Tier 3 emissions.

The MidRange engines will be fully localized in China and adapted for construction equipment usage by the joint operation to meet the demand of both LiuGong and other equipment manufacturers in China.

This investment in MidRange engine production will complement Cummins’ existing manufacturing capabilities in China, focused primarily on the automotive market. Development and optimization of these engines specially for China will add significant value to the country’s construction machinery industry, which has a strong and growing demand for high performance, reliable engine power.

“The joint-venture announced today with LiuGong will create the foundation for both partners to significantly expand in the construction equipment market in China, the largest in the world, and where robust demand will continue to drive growth in the years ahead,” said Tom Linebarger, president and chief operating officer, Cummins Inc.

Cummins currently supplies MidRange engines to LiuGong for both its domestic market in China and its global operations. The joint-venture operation in Liuzhou City will focus on introducing engines purpose-designed and fully localized for construction equipment in China.

“The joint venture between LiuGong and Cummins can be seen as a natural progression of our successful 10-year relationship and we delighted to become even stronger partners,” said Zeng Guang’an, vice chairman and president, Guangxi LiuGong Machinery Co. Ltd.

“By combining our equipment expertise with Cummins world class engine capability, we know we have the right formula in place for our new Guangxi Cummins Industrial Power joint-venture to succeed. Initial operations will begin as early as 2012 with engine kit assembly, providing a useful lead-in to full production engines in 2013.” added Guang’an.