Innovative drive system manufacturer DEUTZ has apparently inked a JV agreement with China’s biggest manufacturer of construction equipment, SANY. If reports are to be believed, the signing of this joint venture agreement signifies a vital milestone in DEUTZ’s growth implementation strategy in China, as claimed by the company’s CEO, Dr. Frank Hiller.
Elaborating further, Hiller stated that DEUTZ is now positioned to leverage the robust growth in the world’s biggest individual market for engines. The associations established with the company’s regional partners will enable the firm to majorly augment its domestic presence for engines, Hiller said, adding that DEUTZ now possesses the access to a lucrative production network that will help the company meet regional customer demands effectively.
Hiller also went on to say that DEUTZ is likely to tap into a massive service network that the firm will continue to enhance alongside digital solutions.
As per sources familiar with the knowledge of the matter, DEUTZ plans to invest an amount in the range of mid-double-digit millions in the new JV, and will hold a stake of 51% in the new company. Armed with the intent to deliver SANY with close to 75,000 new engines in 2022, DEUTZ aims to take over the production of the construction equipment manufacturer’s present portfolio of engines. Apparently, reports cite that these engines will be compliant with the China 6 standards for on-road applications as well as the China IV emissions standard for off-road applications.
Apart from the current JV deal with SANY, DEUTZ also has plans lined up for further expansion in China. It is being speculated that the company has inked a strategic alliance with BEINEI for undertaking local production. The DEUTZ management team will be overseeing the production of around 20,000 engines at a new factory in Tianjin, targeted for the Asian market in 2022.
Reliable sources claim that the transaction closure is anticipated to take place toward the end of the year.