Deutz Business report FY2006
Business Highlights
Financial overview
(in million euros) | 2006 | 2005 | Rate of change | Remarks |
Consolidated | ||||
Revenue | 1490.0 | 1,322.8 | 12.6% | - The revenue was increased primarily due to the double-digit growth in the Compact engines segment. There was a drop in revenue from diesel engines, as planned, as a result of the continued restructuring in DEUTZ Power Systems in 2006. On the other hand, the Company was able to achieve an increase of 38% in revenue from the gas engines. The impact of exchange rates on the development of consolidated revue was negligible. |
Automotive application in the Compact Engines segment | ||||
Revenue | 119.4 | 68.6 | 74.1% | The Company enjoyed the considerable benefit of the first deliveries of the new TCD 2013 4V commercial vehicle engines for the European market from the newly constructed assembly hall at Collogne-Porz. Most of these deliveries took place in the third and forth quarters in 2006. |
Joint Venture
- In December 2006, DEUTZ AG and FAW Jiefang Automotive Co., Ltd., which
is based in Changchun, China, signed a contract to set up a joint venture
to manufacture and sell diesel engines. DEUTZ and FAW will each own
a 50% stake in the joint venture, which will operate under the name
of DEUTZ (Dalian) Engine Co., Ltd. (DEUTZ Dalian). DEUTZ will assume
industrial leadership of the company and will invest the equivalent
of EUR 60 million in the new company. The establishment of DEUTZ Dalian
will considerably expand the co-operation that has already existed for
over 10 years between DEUTZ and FAW Group.
The Company expects to commence operations during the middle of 2007.
The heart of the joint venture, the new engine plant for the production
and assembly of Euro III-compliant engines, will come into full production
within two years of the start of operations. Alongside this development,
products from the other plants in the joint venture will be marketed
to the FAW Group and existing Chinese customers.
R&D
R&D Expenditure
in million euros | 2006 | 2005 | 2004 | 2003 | 2002 |
R&D Overall | 66.4 | 66.9 | 69.5 | 54.9 | 47.1 |
Compact engines segment | 55.9 | 55.9 | 55.3 | N.A. | N.A. |
R&D Structure
The R&D activities of the Company are mainly concentrated in Cologne,
although there is a second site located at Dursley in the Uited Kingdom.
The R&D facility for DEUTZ Power Systems is situated in Mannheim,
Germany.
Product Developments
- Milestones in R&D activity in the segment in 2006 were successful
production launch of the TCD 2013 4V commercial vehicle engines and
industrial engines with full electronic engine control, both in the
4-liter to 8-liter capacity category. Ongoing development projects included
the further development of engines with lower output ratings in the
Mobile Machinery, Automotive, and Agricultural Machinery segments.
Key current research areas in the Compact Engines segment are as
follows:
- Development of basic principles for technologies to achieve EU Stages
III B and IV/EPA Tier 4 emission standards for on-road applications
(injection systems, combustion development, supercharging)
- Exhaust gas aftermarket technologies, such as selective catalytic
reduction and state-of-the art particulate filter systems
- Research projects, for example, on innovative particulate filter technologies
for exhaust gas after treatment and on strategies for the monitoring
and generation of future particulate filter systems
- Alternative fuels, drive concepts, new design concepts and fuel consumption
reduction on existing systems
Investment Activities
in million euros | 2006 | 2005 | 2004 | 2003 | 2002 |
Investment | 108.2 | 85.9 | 58.8 | 40.7 | 59.5 |
Compact engine segment
- Capital expenditure in the Compact Engines segment was considerably
higher than in the previous year at 104.3 million euros (2005: 80.7million
euros).
- Much of this investment was concentrated in the new assembly facility
for the TCD 2013 4V series at the Cologne-Porz plant*. This facility
became operational during the year under review. In connection with
this development, production of components at the Cologne-Deutz and
Zafra, Spain, sites was expanded.
The new assembly facility for the TCD 2013 4V commercial vehicle engine
was built in just six months and the first assembly lines are already
being installed. This increases the yearly assembly capacity at the
Cologne-Porz facility by 30,000 engines.
In 2007 and subsequent years, a considerable amount of attention will be given to the expansion of the DEUTZ Dailan joint venture in China. The Company will invest around 60 million euros in 2007 for 50 per cent of shares in the joint venture.