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 global market, particularly in China. 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. Once operational, BFCEC will become the sole production base for Cummins' light-duty diesel engines outside the United States.
Under the agreement, Foton Motors and Foton Environmental Power each hold a 50% stake in the joint venture, with Foton Motor’s share not falling below 25%. Cummins and its Chinese subsidiary collectively own the remaining 50%. Each partner's contribution may include cash, land, equipment, or technology. The joint venture is set to operate for 30 years, with its headquarters located in Changping District, Beijing. It is expected to be officially established by the third quarter of this year.
The new company will produce two newly developed Cummins engines tailored for travel utility vehicles, vans, pickup trucks, medium and light commercial vehicles, and off-road vehicles. The 3.8L engine will begin limited production in early 2008, while the 2.8L version is scheduled for the first half of 2009. This collaboration aims to enhance Foton's engine capabilities and support its global vehicle development strategy.
From Cummins’ perspective, this partnership allows it to expand its reach into the light-duty and off-road vehicle markets in China. While Cummins has previously focused on medium and heavy-duty diesel engines, this joint venture represents a shift toward producing cost-effective, low-emission engines for a broader range of applications.
Foton will source all required engines from BFCEC for use in its vehicles and sub-brands, while Cummins will purchase engines for sale to non-Foton OEMs both in China and internationally. The joint venture also plans to expand its engine sales beyond Foton through Cummins East Asia Marketing. Importantly, the company will not leverage existing marketing resources from either Foton or Cummins.
Cummins’ distribution network will provide service support for non-Foton applications in mainland China and overseas, while Foton’s own network will handle after-sales services for its domestic customers. This ensures a clear division of responsibilities and maintains brand-specific support.
Cummins Inc., based in Indiana, USA, is the world’s largest independent automotive engine manufacturer, renowned for its leadership in diesel and CNG engine design, production, and service. With a strong global presence, including a New York Stock Exchange listing under "CMI," Cummins continues to innovate in fuel efficiency, emissions control, and durability.
Cummins Investment, a wholly-owned subsidiary, manages all investments in East Asia, having invested over $140 million in the region. Meanwhile, Foton Environmental Protection Power, established in 1999, is a major player in engine manufacturing, with Foton Motor as its largest shareholder. The company offers a wide range of diesel and gasoline engines, supporting various commercial and passenger vehicle applications.
This collaboration between Foton and Cummins highlights the growing trend of strategic partnerships in the automotive industry, combining local expertise with global innovation to meet evolving market demands.
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