DEUTZ AG has announced today that it has agreed with its partner AB Volvo not to pro-ceed with their proposed DEUTZ Engine (China) Co., Ltd. (DEC) joint venture. When it re-ported its most recent quarterly financial results back in November 2014, DEUTZ an-nounced 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 situa-tion 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 re-mains our stated objective to use Chinese production facilities in order to meet local de-mand 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," explained 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 three to eight-litre diesel engines are manufactured – primarily for the Chinese market.