Volvo and DEUTZ negotiate extension of co-operation agreement
The Volvo Group and DEUTZ AG concluded a co-operation agreement in 1998 concerning the development and supply of diesel engines with 4-7 litre displacement for non-automotive and automotive applications. Since then the DEUTZ products have strongly contributed to the successful growth of Volvo’s Medium duty Engine Platform. The agreement has a term of 15 years and it expires at the end of the year 2013.
Although the agreement is set to remain unchanged for the next 4 years, both companies have already now started negotiations on products, volumes and terms for the continuation of their partnership in the period beginning in 2014.
Catalysts for the early start of the negotiations are the long development times for the next exhaust gas emission stages for industrial engines and the decision of Volvo to develop their own automotive engine for the next emission stage Euro 6.
Common projects for industrial engines with the exhaust gas ratings COM II, III A, III B and IV (EPA 2, 3, 4 interim and 4 final) and automotive engines with the exhaust gas ratings Euro 3, 4 and 5 are not affected by this decision and both partners are targeting to further increase sales of engines with 4-7 litre displacement in these segments.
DEUTZ requires its own development resources for the business expansion in the compact engine range up to 4 litre displacement, where two entirely new engine series are developed for the next exhaust emission stages in the off-road segment.