Rolls-Royce Begins Joint Venture with Chinese Firm to Produce MTU Engines

Rolls-Royce subsidiary MTU Friedrichshafen and Chinese firm Guangxi Yuchai Machinery have recently entered into a joint venture to produce MTU engines. Each company will invest around 10.5 million Euro in the joint venture, which will be based at GYMCL’s main production facilities in Yulin City in Guangxi Province, south China.

The joint venture will manufacture MTU Series 4000 diesel engines compliant with China Tier 3 emission standards with power outputs ranging from 1400 to 3490 kW, mainly for the Chinese off-highway market, particularly for power generation as well as oil and gas applications.

This is anticipated to open up new growth opportunities for both partners, specifically in China and Asia as a whole. It will also enable better access to the Chinese market for the MTU Series 4000 diesel engines, through the extensive sales and service network operated by GYMCL. As a result of the joint venture, GYMCL will be able to offer technologically advanced engines that have a proven record on the international market.

The engines will be marketed by MTU Suzhou and GYMCL within China and by MTU and its subsidiaries outside China. From 2020, GYMCL’s sales territory will be extended to selected South East Asian countries such as Malaysia, Thailand and Vietnam.

After a ramp-up phase of three to five years, the joint venture’s scope might be extended to research and development activities as well as possibly direct sales from the joint venture to the customer.

The establishment of the joint venture is subject to the fulfillment of specific conditions, including but not limited to approvals by the pertinent authorities.