RERMAG

Deutz Sales Slow in Europe; Gearing Up in Asia

Total engines sold by Deutz dropped 12.4 percent from 107,198 engines in the first six months of 2011 to 93,853 engines sold in the first six months of 2012. First-half revenue decline, however, was only 6 percent from €724.1 million to €681 million because the new Tier 4 Interim engines are more complex and expensive.

Deutz has responded to weaker demand by cutting forecasts for the year.

Deutz AG increased engine unit sales from 46,461 engines in the first quarter to 47,392 engines in the second quarter, a 2-percent increase. Operating profit rose from €10.3 million to €11.3 million sequentially, a 9.7-percent increase. However, Deutz received orders worth €701 million (about U.S. $861.9 million), a 12.1-percent decrease compared to the first six months of 2011 when it sold €797.1.

“In the first half of 2012, we were unable to build on our impressive start to the year,” said Dr. Helmut Leube, Deutz chairman. “This was largely due to the macroeconomic situation, which is still afflicted by considerable uncertainty. Nonetheless, we are confident that Deutz is well positioned for the future and will continue to grow profitable over the medium to long term.”

Leube expressed optimism in regard to Deutz’ expansion plans in Asia.

“Our new joint venture in Shandong is rapidly gaining momentum and should soon enable us to achieve our ambitious goals in Asia,” he added. “Our plans to set up a joint venture in China with Volvo are also making good headway. In addition, we have opened new service centers in Moscow and Madrid in order to expand our service-related business.”

Deutz is based in Cologne, Germany.

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