• European Company Profile: Deutz

Deutz is one of the world’s leading manufacturers of drive systems for off-highway applications. The company was founded in 1864 and has around 4,600 employees worldwide, 3,300 of whom work in Germany. Its core competencies are the development, production, and distribution of drive solutions with a power output of up to 620 kW for off-high-way applications. The current portfolio extends from diesel and gas engines to hybrid and all-electric drives that are used in various applications, including construction equipment, agricultural machinery, material handling equipment such as forklift trucks and lifting platforms, commercial vehicles, rail vehicles, and boats used for private or commercial purposes.

Deutz’s global headquarters is situated in Cologne-Porz, Germany and the company’s operating activities are divided into three segments: Deutz Compact Engines (DCE), Deutz Customised Solutions (DCS), and Other.

The DCE segment, which generated around 73 per cent of consolidated revenue in 2020, comprises liquid-cooled engines with capacities of up to 8 litres as well as a joint venture with Chinese construction equipment manufacturer Sany. The DCS segment comprises liquid-cooled engines with capacities of over 8 litres, air-cooled drives, re-conditioned exchange engines and parts produced under the name Xchange. The DCS segment’s share of revenue in 2020 was around 24 per cent. The Torqeedo subsidiary is included in the Other segment and focuses on electricpowered watercraft. Futavis, a development service provider that specialises in high-voltage battery management systems and safety engineering, is also included in the Other segment. It was acquired in 2019.

Deutz has an extensive global distribution network numbering more than 800 sales and service partners in some 130 countries, in addition to 14 subsidiary companies, 27 service centres and six sales offices worldwide. In addition to its main factory in Cologne, the company has eight other engine and component manufacturing facilities in Germany, Spain, Morocco, USA and China.

In an era of ever tightening emissions legislation and an industry where many engine builders have been acquired by equipment manufacturers, Deutz continues to forge successfully ahead as an independent manufacturer. Engine supply agreements with the Swedish Volvo group and Italian tractor manufacturer, SAME Deutz-Fahr, have been of particular significance.

Inevitably, the coronavirus pandemic has created unprecedented challenges for Deutz as a global company with international sales markets and supply chains. It temporarily suspended production in Europe in April 2020, while the massive slump in demand in what was already a challenging market environment resulted in a year-on-year decline in revenue of 29.6 per cent to €1,295.6 million. Conversely,the successful implementation of Deutz’s China strategy enabled it to achieve profit in that region in the first half of 2020 and increase its sales target in this market for 2022 from around €500 million to around €800 million.

In 2020, Deutz launched a global efficiency programme, ‘Transform for Growth’, which it hopes will lead to annual cost savings of approximately €100 million (gross) from the end of 2022. Together with a rigorous implementation of its growth initiatives, the company believes it is taking the steps now that are needed to secure its future success. The impact of the pandemic means Deutz now expects to realise its medium-term targets in 2023/24 rather than in 2022 as originally planned, although has a clear objective of achieving more than €2 billion revenue, with electric drive systems accounting for 5 to 10 per cent of revenue.

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European Company Profile: Deutz

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    June 2021
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Tags: Europe, Global, Deutz