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Cummins and Beiqi Foton Motor Form Joint Venture to Produce High-Performance, Light-Duty Diesel Engines in China

19 October 2006

Cummins Inc. and Beijing-based Beiqi Foton Motor Company (Beiqi Foton) are forming a 50/50 joint venture company—Beijing Foton Cummins Engine Company Limited (BFCEC)—to produce two types of Cummins light-duty, high-performance diesel engines in Beijing.

The engines primarily will be used in light-duty commercial trucks, pickup trucks, multipurpose and sport utility vehicles. Certain types of marine, small construction equipment and industrial applications also will be served by this engine family.

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 two partners initially will invest a combined $126 million into BFCEC.

The joint venture plant will have an annual capacity of 400,000 units and will produce Cummins 2.8-liter and 3.8-liter diesel engines, which will meet stringent on-highway and off-highway emission standards worldwide, including Euro 4 and above. BFCEC is scheduled to begin production in 2008.

The light-duty truck market in China produced 860,000 units in 2005 and is projected to grow at 8% a year for the foreseeable future.

Cummins began licensing its engine technology in China in 1981 and formed its first joint venture in the country in 1995. The company is the leading foreign producer of heavy-duty and mid-range diesel engines there.

October 19, 2006 in China, Diesel | Permalink | Comments (6) | TrackBack (0)

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Comments

Euro 4 diesel standards will come into effect in Beijing on 1-1-2008 and on 1-1-2010 elsewhere in China. A number of engine manufacturers succeeded in meeting these standards even without DPFs, though afaik Cummins isn't one of them.

It will be interesting to see if China decides to mandate DPFs regardless, now that the technology is available.

__The rollout of more stringent emission standards should really be sped up. The big cities, and densely populated areas in which topographical/climatological situations cause the attenuation of airborne pollution, should get the bump up first. That would bring the biggest bang for the effort.
__Another thing to consider is that the demographics of the PRC is rapidly aging. As one reaches old age (and continues to age), one becomes more susceptible to the ill effects of air pollution. There is already the problem of smoking in the middle age/older population (>30yrs old population seems to have a much lower smoking rate). As many know, to quit smoking is hard, and all those jobs are either in smoke belching factories, or powered by smoky coal fired electric power. Couple this with other sources of air pollution, and there is a looming cloud of respiratory disease amongst those reaching old age. This means lost productivity, lost time/wage-working hours, early/disability retirement, higher health costs, birth defects, early death, ultimately if not fixed, and social instability (list is a small sampling of consequences). They will either be more proactive in new legislation and enforcement, or they will be forced to act via social/political/economic upheaval.

Given that Chinese cars are coming to the US in the very near future, I wonder how many years it will be before Chinese-made trucks with Cummins/Foton diesel engines will be sold in the US. Three? Four?

Zach -

your fears may be exaggerated. Chinese vehicle manufacturers still lag their Western counterparts by a decade or two in terms of technological prowess.

Plus, US emissions regs for HDVs are calling for 80-90% reductions in NOx and PM by 2010. China's insistence on joint ventures and technology transfer, coupled with notoriously poor legal protections for Western IP, mean Cummins and other engine manufacturers should be loath to build their latest-generation products in China. Labor costs anyhow make up only a small portion of engine manufacturing.

Zack,
The Wall Street Journal reported that due to setbacks, and embarrassing results from tests, and reviews of their products, they will hold off introducing Chinese brands to the US market for ~10 years to improve their cars. Automobiles made by joint venture with global auto makers (GM, VW, DC, etc), and branded as such, may come out first, some in the next 5 years. These will likely be low end class B and C cars. You may get a Jetta assembled in the PRC in Europe by 2010.

Estamos interesados en comprar motores CUMIS vehiculares de 120 caballos turbo alimentados 4 cilindros y 6 cilindros de 180 de 225 de 250 de 300 hp cantidades minimas a despachar tiempo de entrega y saber si ustedes fabrican las cajas fuler o equivalentes para estos motores

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