Foton Motor Co., Ltd. and Beijing Foton Environmental Protection Co., Ltd. have entered into a strategic partnership with Cummins Inc. and Cummins (China) Investment Co., Ltd. to form Beijing Foton Cummins Engine Co., Ltd. (BFCEC). This joint venture marks a significant step in expanding Cummins' presence in the Chinese market, as BFCEC will become the sole production base for light-duty diesel engines outside the United States.
The project has a total investment of 1.946 billion yuan, with a registered capital of 1.019 billion yuan, which will be fully funded within three years. The ownership structure is evenly split between Foton Motor and Foton Environmental Power, each holding 50% of the shares. Foton Motor’s stake will not fall below 25%, while Cummins and its subsidiary hold the remaining 50%. Each party can contribute cash, land, equipment, or technology as part of their investment.
The joint venture will operate for 30 years and is based in Changping District, Beijing. It is expected to be officially established by the third quarter of this year. The company will produce two new engine models developed specifically for the joint venture—3.8L and 2.8L engines. The 3.8L model is set to begin limited production in early 2008, followed by the 2.8L version in the first half of 2009. These engines will be used across a range of vehicles, including utility vehicles, vans, pickup trucks, and off-road models.
This collaboration is more than just a business deal; it represents a long-term strategic move for both companies. For Foton, it provides access to advanced engine technology, helping it meet global standards and enhance its vehicle offerings. Cummins, on the other hand, aims to expand its footprint in the light-duty and off-road vehicle segments in China, where it currently focuses mainly on medium- and heavy-duty engines.
Under the agreement, Foton will prioritize using engines from the joint venture in its own vehicles and sub-brands, while Cummins will supply the engines to non-Foton OEMs both domestically and internationally. The joint venture will also leverage Cummins East Asia Marketing to reach additional customers beyond Foton.
Cummins’ distribution network will support non-Foton applications in mainland China and overseas, while Foton’s own network will handle after-sales service for its own vehicles. This ensures a seamless customer experience across all product lines.
Cummins Inc., based in Indiana, USA, is the world’s largest independent manufacturer of automotive engines, known for its leadership in diesel and CNG engine design, production, and service. Its products are renowned for efficiency, low emissions, and durability. Cummins shares are listed on the New York Stock Exchange under the ticker symbol "CMI."
Cummins Investment, a wholly-owned subsidiary, manages all of Cummins’ investments in East Asia, having invested over $140 million in the region. Meanwhile, Beijing Foton Environmental Protection Power, established in 1999, is a key player in the engine industry, with Foton Motor as its largest shareholder. The company produces a wide range of diesel and gasoline engines, serving both domestic and international markets.
This partnership underscores the growing importance of collaboration in the automotive industry, especially as companies seek to innovate, reduce costs, and meet global environmental standards. With strong backing from both sides, BFCEC is well-positioned to play a pivotal role in shaping the future of engine manufacturing in China and beyond.
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