In a deal marking a turning point for two tradition-rich companies, Daimler Truck AG, long renowned for building its own brand of diesel engines, will turn to Cummins Inc. to build its medium-duty engines.
Under the terms of a strategic partnership announced by the two companies, Cummins will supply medium-duty engines, predominantly diesels, for Daimler trucks and buses worldwide.
Columbus, IN-based Cummins plans to establish an engine production facility on the site of the Mercedes-Benz plant in Mannheim, Germany, for production of engines that meet Euro VII emissions standards for Daimler starting in the second half of the decade.
The plans require Daimler Truck to cease new investment of its own funds in the further development of its medium-duty engines that are Euro VII-compliant, company executives say.
“With the changeover to Euro VII, we would have to invest considerable resources in the further development of our medium-duty engines,” explains Martin Daum, chairman of the Board of Management at Daimler Truck and a member of the Board of Management at Daimler AG.
“We are now freeing up these funds to focus them on the technologies that are crucial to our long-term corporate success in the transformation of our industry.”
This fall, Daimler’s Mercedes-Benz Trucks will begin building a new, battery-electric heavy-duty truck, the eActros.
“We have to acknowledge that transport is a part of the problem when it comes to climate change,” says Karin Rådström, member of the Board of Management at Daimler Truck and head of Mercedes-Benz Trucks. “At the same time, we can and we will be part of the solution. We start with our eActros that has covered more than half a million kilometers (300,000 miles) on public roads.”
The eActros’ powertrain comprises two integrated electric motors and a two-speed transmission. The emissions-free truck, which will be available throughout Western Europe soon, can be used
for night deliveries and entry into inner cities where diesel vehicles are banned, Daimler executives say.
For Cummins, the deal opens up new opportunities at a time when its traditional diesel engine business is under pressure from the shift to electrification and tightening emission standards.
“We are pleased to sign this agreement as we move forward in collaboration to provide the medium-duty engine systems for Daimler Trucks and Buses in global markets,” says Cummins Chairman and CEO Tom Linebarger.
Daimler Truck is one of the world’s largest commercial vehicle manufacturers, with more than 35 primary locations globally and 100,000 employees. The company brings seven vehicle brands together under one roof, including Mercedes-Benz light, medium and heavy trucks as well as city, intercity and touring coaches; Setra intercity, long-distance and premium coaches; and Freightliner Trucks and Thomas buses in the U.S. (pictured above).
The strategic partnership will help Daimler Truck and Cummins maintain jobs at the Mannheim location.
The agreement also allows Cummins to use its existing footprint and strong production and supply chain networks to successfully supply Daimler Truck brands, including those of Daimler Trucks North America.
And it allows Cummins to grow its presence and footprint across Europe as it expands its product portfolio ranging from advanced diesel, natural gas, electrified power, hybrids and hydrogen fuel cell powertrains.