Deutz, Daimler Truck enter into engine development deal

Dr Sebastian C Schulte (right) and Dr Andreas Gorbach (Photo: Deutz)

German engine manufacturer Deutz has reported that it will cooperate with Daimler Truck to develop and market medium- and heavy-duty engines. The move follows Daimler’s announcement that the company no longer plans to invest in developing these engines.

As part of the deal, Daimler Truck will take a 4.19% stake in Deutz. The investment will make it a ‘large’ shareholder.

The agreement will see Deutz acquire the intellectual property for Daimler engines by the end of the decade. These include the medium-duty (MDEG series) engines, used in applications including construction equipment, together with heavy-duty (HDEP series) engines, which are used to power such equipment as heavy agricultural machinery.

The license will cover further development of the engines, while Deutz will also independently distribute those same engines.

The medium-duty engines will be produced completely by Deutz, while the heavy-duty versions will be manufactured by Daimler Truck and shipped to Deutz for final assembly. The engines to be marketed by Deutz are scheduled to enter production in 2028.

Cooperation between the two companies is said to be the first step for Deutz in achieving its climate-neutral product portfolio. At the same time it will further develop its classic engines.

The consolidation is further reported as a plan to position Deutz as one of the top three independent engine manufacturers.

“The cooperation with Daimler Truck will significantly improve our starting position in a consolidating market as we will gain access to technologically advanced engines and will be able to attract new customer groups at the same time,” said Deutz CEO Dr Sebastian C. Schulte.

He continued: “Heavy-duty applications and agriculture still require conventional powertrain systems based on internal combustion engines and these can be made more environmentally friendly by running them on synthetic fuels. In the next few years, we will therefore not only enhance our climate-neutral product portfolio but also further expand our classic engine business.”

Dr. Andreas Gorbach, member of the Board of Management of Daimler Truck AG with responsibility for Truck Technology, said: “We are delighted to be forming a partnership with the established and independent drive specialist Deutz. In line with our strategic focus on transportation that is carbon-neutral at local level, we announced last year that Daimler Truck would not be investing any more of its own money in the further development of its medium-duty engines for the Euro VII emissions standard.”