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Cummins expands further in the light-duty truck market in China

Cummins and Beiqi Foton Motor sign joint venture feasibility study to produce light-duty diesel engines in China

Cummins and Beiqi Foton Motor sign joint venture feasibility study to produce light-duty diesel engines in China and Beiqi Foton Motor sign joint venture feasibility study to produce light-duty diesel engines in China

Beijing Foton Cummins Engine Company will be based in Beijing and will produce two types of engines based on Cummins designs. The feasibility study is the last step before Cummins and Beiqi Foton, a publicly-traded company based in Beijing, sign the joint venture agreement, and it outlines the parameters of the partnership. The joint venture is expected to begin operation in 2006, with production starting as early as 2008.

The two companies are expected to invest capital, equipment, land and technology in the joint venture. The engines produced by the joint venture will be suitable for use in a range of applications, including light-duty commercial trucks, pickup trucks, SUVs, MPVs, small construction equipment, marine and mobile power generation.

The joint venture represents further expansion of Cummins product line in China, where the Company already is the leading foreign producer of heavy-duty diesel engines. Cummins currently does not compete in the light-duty diesel market in China.

In 2005, the light-duty truck market in China produced 860,000 units and is projected to grow at 8 percent a year for the foreseeable future. Foton, founded in 1996, is the largest producer in the light-duty truck market in China, selling more than 260,000 units in 2005. The joint venture will be the ninth production operation for Cummins in China.

The agreement was signed by John Watkins, Cummins Vice President and the President of Cummins East Asia, and Wang Hongjie, Vice Chairman of Cummins (China) Investment Co. Ltd., together with An Qingheng, Chairman of Beiqi Foton, and Wang Jinyu, General Manager of Beiqi Foton.

“This agreement is a critical next step in Cummins continuing efforts to grow in the important China market,” Watkins said. “Entering the light-duty engine market with a successful partner such as Foton is consistent with our history of partnering with leading Chinese companies and with our long-term development strategy in China.”

Chairman An of Foton also praised the agreement. “Foton Motor is a strong player in China’s commercial vehicle industry, while Cummins represents the global power leader. The cooperation between the two powerhouses will bring us a win-win relationship.”

About Foton Motor
Beiqi Foton Motor Co., Ltd., established in 1996, has quickly grown into one of China’s largest producers in the commercial vehicle industry, and the leading maker of light-duty trucks. Foton’s product line includes trucks with payload under 35 tons, light bus, SUV, pickup truck, medium and large buses. With 28,000 employees, Foton produced more than 310,000 vehicles in 2005.

Cummins in China
Cummins is the largest foreign investor in the China diesel engine industry. The Company’s ties to the country date back to 1975 when then-CEO J. Irwin Miller led the first Cummins delegation to Beijing, making him one of the first American business leaders to seek opportunities in China.

Cummins began licensing its engine technology in China in 1981 and formed its first joint venture in the country in 1995. Today, Cummins operates more than 20 facilities in China – including eight manufacturing sites – with all areas of the Company’s business represented in China. Cummins consolidated and unconsolidated sales in China have exceeded $1 billion for the past two years.

About Cummins Inc.
Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, Cummins serves customers in more than 160 countries through its network of 550 Company-owned and independent distributor facilities and more than 5,000 dealer locations. Cummins reported net income of $550 million on sales of $9.9 billion in 2005. Press releases can be found on the Web at

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Fri. July 19th, 2024

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