Deutz, Daimler Truck to cooperate on medium- and heavy-duty engines

30 January 2023

Deutz AG and Daimler Truck AG signed agreements giving Deutz access to Daimler engines by the end of the decade, including both Daimler Medium-Duty Engine Generation (MDEG) engines and Daimler Heavy-Duty Engine Platform (HDEP) engines. These two lines of diesel engines—sold under the Mercedes-Benz, Detroit Diesel, and Mitsubishi Fuso brands—are suitable for such applications as construction equipment and heavy agricultural machinery, said Deutz in a press release.

Payment for the two transactions is “in the mid-double-digit millions of euros”. Under the deal, Daimler Truck will also take a 4.19% stake in Deutz AG. The completion of the transactions is subject to customary regulatory approvals.

As a result of the agreements, Deutz will be able to attract new customer groups, save on development costs, and expand its range of modern internal combustion engines, the company said. The cooperation between the two companies is focused on two areas:

1. Deutz will acquire the on-highway intellectual property to Daimler Truck’s medium-duty MDEG engines so that it can further develop them itself, including for use in off-highway applications such as agricultural machinery and construction equipment.
2. Deutz will acquire license rights from Daimler Truck so that it can further develop the heavy-duty Daimler Truck HDEP series for use in off-highway applications. It will also distribute these engines independently.

The heavy-duty engines will continue to be built by Daimler Truck at the Mercedes-Benz plant in Mannheim and shipped to Deutz for final assembly, whereas the medium-duty engines will be completely produced at Deutz. The engine variants that will be marketed by Deutz are scheduled to go into production in 2028.

The cooperation between the two companies is a first sign of Deutz’s Dual+ strategy, under which it will not only step up the development of a climate-neutral product portfolio but also optimize and further develop its classic engines. Under the Dual+ strategy, Deutz intends to establish itself permanently among the top three independent engine manufacturers, including through acquisitions and cooperations, and to play an active part in the consolidation of the engine market.

In 2021, Daimler Truck AG and Cummins announced that they would enter into a global strategic partnership for medium-duty engines. In the second half of the decade, Cummins will produce Euro VII medium-duty engines for Daimler Truck vehicles, while Daimler would not be investing its own money into the development of Euro VII medium-duty engines. As part of a strategic partnership, Cummins will invest in further developing the medium-duty engine platform and its global production.

Source: Deutz