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Venture to make Cummins engines in China

Cummins Inc and China's Shaanxi Automobile Group Co Ltd have signed an agreement to form a 50/50 joint venture company, Xi'an Cummins Engine Co (XCEC). This company will produce the Cummins ISM 11-liter heavy-duty engine in Xi'an, the capital city of western China's Shaanxi Province.

The agreement was signed by John Watkins, Cummins vice-president and head of Cummins operations in China, and Wang Hongjie, vice-chairman of Cummins China Investment Co Ltd, together with Zhang Yupu, chairman of Shaanqi Group, and Nie Xinyong, chairman of Shaanxi Heavy-duty Truck Co Ltd, a subsidiary of Shaanqi Group.

The companies initially will invest $24 million in capital into the joint venture company, which will have access to the Cummins 11-liter, full-electronic ISM engine platform from 305 to 440 horsepower. Construction of the plant could begin in fourth quarter 2005, and production could start as early as third quarter 2006. The market for heavy-duty trucks with payloads greater than 15 tons is expected to be around 200,000 units by 2010. The joint venture's projected production is 50,000 units by 2010.

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