MTU to Build Engines in China

Monday, June 26, 2006
One year after the foundation was laid for the MTU Group’s new facility in the Chinese city of Suzhou, a ceremony marked the start of local assembly of MTU Series 2000 diesel engines. The facility is located in Suzhou Industrial Park (SIP) around 100 km north-west of Shanghai and the gensets assembled there, exclusively for the Chinese market, are earmarked for service in decentralized power generation plants. The MTU Group has been marketing engines in China for more than 40 years, and this latest project reflects the lively domestic demand for power generation units, several hundred of which will leave the gates of the MTU factory in Suzhou every year in future. “Our commitment in China is another major step in the internationalization of our company”, emphasized Volker Heuer, Chairman of the Board of Management of the MTU Group. “Local assembly of our products at the new facility will positively influence our relationship with our customers and business partners as well as safeguarding employment at the Friedrichshafen location at the same time.” The initial decision on the Suzhou investment was made in 1995 and led, in 1996, to the foundation of MTU Engineering (Suzhou) Co., Ltd. which has provided marketing and after-sales support for MTU applications in China until now. The actual investment for the assembly facility for MTU Engineering (Suzhou) Co., Ltd. was made by MTU Asia Pte Ltd, Singapore, a wholly-owned subsidiary which is also headquarters of the Sales Region Asia/Pacific. Local assembly of engines in Suzhou includes the V12, V16 and V18- cylinder versions of MTU’s Series 2000 engines. In the medium term, up to 30 percent of the engine components will be supplied by locally-based companies thus giving MTU a solid sourcing platform in this important Asian market. The resultant relationships with both local and international partners will provide the MTU Group, medium term, with potential for further growth in the decentralized power generation sector as well as in other areas of business activity. MTU President and CEO, Heuer: “This gives us an extremely good opportunity to expand our product range in China in the medium term and to participate in continued market growth.” Apart from its engine assembly facilities, the MTU site in Suzhou also accommodates testing and maintenance plant, a fully integrated service workshop, a training center and a parts store together with the necessary logistic structures - and the Suzhou Industrial Park provides MTU with access to a highly-developed infrastructure directly on-site. The diesel engines assembled here will be produced in strict compliance with the company’s own stringent production and quality standards. The MTU Group is one of the world’s leading suppliers of diesel engines and complete drive systems for ships, heavy land and rail vehicles and decentralized power generation. Worldwide, the company has a workforce of more than 7,000 and in 2005 it achieved sales of over € 2 bn.

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