Deutz and Volvo Pull Out of China Joint Venture

February 13, 2015

Deutz says it has agreed with its partner Volvo not to proceed with their proposed Deutz Engine (China) joint venture.

When it reported its most recent quarterly financial results back in November 2014, the German diesel engine manufacturer

announced that both companies would be conducting a strategic reassessment of the joint venture. Having completed a thorough and comprehensive review, Deutz and Volvo have agreed to wind up the production company given the weak prevailing market situation in China. The joint venture has not yet made any substantial investments.

However, Deutz says 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 Volvo and other target customers and, to this end, we will be focusing on our Deutz Dalian Engine (DDE) joint venture," explained Dr Helmut Leube, chairman of the Deutz Board of Management.

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.

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