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Cummins China: growth amid adversity in 2014

BEIJING – For Cummins, 2014 was a year of “growth amid adversity” for its China operations, according to Liu Xiaoxing, vice president of the U.S. diesel engine maker and vice chairman of Cummins (China) Investment Co., Ltd.

Liu made the comments at a media appreciation event on January 30 in Beijing.

“Everything was down in 2014,” said Liu. “The macro economy, the commercial vehicle industry, you name it. The only segments that grew were probably small buses and forklift trucks.”

Cummins, however, saw double-digit growth in its overall business as well as its engine business.

“It was a year of growth but more importantly a year of milestones for Cummins,” said Liu.

One of those milestones is the start of local production of the ISG series 11L and 12L heavy-duty engines tailor-made for the Chinese market at the Beijing Foton Cummins Engine joint venture in June. The ISG series was designed locally adopting Cummins’ latest technologies and has the same weight as a comparable 9L engine but 50-60 percent less parts, according to Liu. It also has an extra-long oil change period of 100,000 km, compared with 10,000 km for similar engines in its class.

Another milestone was the launch of Cummins’ first locally made L8.9G natural gas engine in April. It also developed a QSB6.7L engine specifically catered to the Chinese engineering machinery industry. Most recently, Cummins began construction of its high-horsepower engine production and R&D base at the Chongqing-Cummins Engine JV. Its parts and components business also achieved significant growth.

On the telematics side, Liu revealed that more and more of its customers have adopted Cummins’ proprietary telematics system in their vehicles to help Cummins gain access to important data as well as provide better customer service using these data.

“These achievements in 2014 provide a solid foundation for our future sustainable development in China,” said Liu.

Liu stressed that Cummins, which is celebrating 40 years in China this year, has become an important part of China’s commercial vehicle industry and a key player involved in the country’s efforts to reduce emissions and energy consumption.

“The new emissions standards have been implemented. Cummins wishes to be a role model in the efforts to push ahead the smooth implementation of these standards,” said Liu. “We wish that all stakeholders focus on the emissions reduction along the entire value chain, not only R&D and manufacturing but also sales, service and remanufacturing.”

Cummins, as the largest foreign investor in China’s diesel engine industry and one of the earliest western diesel engine makers to localize production, has four engine JVs in China producing 15 of the 24 models in the company’s engine lineup.

China has become Cummins’ largest and fastest growing overseas market with 2013 revenues reaching $3.5 billion.

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