Cummins joined hands with Foton to produce light diesel engines

Cummins, the world's biggest diesel engine maker, said on Friday it has finished a deal with Chinese truck producer Beiqi Foton Motor to create an engine joint venture in Beijing.

The two sides planed to invest a total of 2.5 billion Yuan in the 50/50 joint venture, which had registered capital of 1 billion Yuan. The venture, which will start to make Cummins 2.8 and 3.8-liter diesel engines in 2008, will have an annual production capacity of 40,000 engines. The product produced by the venture will be adopted by Foton vehicles as well as be exported abroad through Cummins sale network.

Beijing Automotive Industry Corp, has been the long-time leader of the nation's light-duty truck market, while Cummins is the world largest engine maker. Insiders believe such an alliance will not only bring a win-win result but promote technology progresses for both parts. Beiqi Foton official Zhao Jingguang said that the company plan to sell 1 million vehicles a year by 2010, with one-fifth being sold overseas. This cooperation will help Foton to maintain its leadership in China light truck market for the coming 20 years.