Cummins and Tata Expand Indian Diesel Engine Production
27 January 2006
|The Cummins ISB|
Cummins and India-based Tata Motors have signed an agreement that will allow their joint venture in India, Tata Cummins Ltd. (TCL), to begin manufacturing the ISB diesel engine in the near future.
TCL currently produces approximately 69,000 Cummins B Series engines a year. Under the agreement, TCL will increase its total engine production to 100,000 units within two years and 120,000 units thereafter. The engines produced by TCL will meet Euro-2, Euro-3 and Euro-4 standards for diesel emissions.
The Cummins ISB engines, which range from 185 hp to 275 hp, are based on the B-series platform (3+ million in operation worldwide). The ISB features a cooled Exhaust Gas Recirculation (EGR) system and variable geometry turbocharger on ratings of 245 hp and higher. Fuel economy is up to 2% better than its predecessor.
India began implementing mass emission limits for vehicles in the early 1990s. Since 2000, India has started adopting the Euro emission and fuel regulations for four-wheeled light-duty and for heavy-duty vehicles.
On the light-duty vehicle side, Euro 2 is mandated nationwide, with Euro 3 standards required in the national capital area (NCR) and 10 of the major cities; Euro 3 will be required nationwide by 2010. For the NCR and 10 major cities, Euro 4 will be required by 2010.
Heavy-duty trucks and buses currently need only met Euro-2 standards nationwide, with an upgrade to Euro 3 in 2010.
The estimated $60 million needed for the expansion will be funded by TCL’s ongoing cash flow and joint venture debt.
Formed in 1992, TCL has been a successful joint venture between the two companies and manufactures the Cummins B Series engines in India for use in trucks manufactured by Tata Motors (TML), as well as sales by Cummins in India to other applications and OEMs.
TML is the largest truck producer in India, with a market share of between 60 and 70%. The Cummins B Series engines power more than half of those trucks. In addition, the B Series captured a 37% share of the overall Indian medium and heavy commercial vehicle engine market in 2004.
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