DEUTZ consolidates operations in China

• DEUTZ AG and AB Volvo decide to wind up joint venture

• Move prompted by weak prevailing market situation in China

• DEUTZ plans to continue using local production facilities to meet demand in China

DEUTZ AG has announced today 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," explained Dr Helmut Leube, chairman of the Board of Management of DEUTZ AG.