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Deutz AG: “Will not build electric motors in Germany”: Oldest engine builder announces new strategy

The oldest engine builder in the world presents its new strategy program. In addition to investments in climate-neutral technologies, the classic combustion engine division is to be strengthened.

Deutz AG plans to strengthen its locations internationally and to expand them, especially in the USA and Europe.  Source: DEUTZ AG

Deutz

Deutz AG plans to strengthen its locations internationally and to expand them, especially in the USA and Europe.

(Photo: DEUTZ AG)

Düsseldorf When Sebastian Schulte thanks his employees for the “strong year 2022”, applause breaks out in the company canteen. The CEO of Deutz AG presented the “Dual+” strategy program on Thursday. The turnover of the oldest engine manufacturer in the world is to be increased to 500 million euros.

Schulte wants to achieve this with a worldwide expansion of the service business as well as through acquisitions and consolidations. In addition, more than 100 million euros are to be invested in the “Green” segment over the next three years, with which alternative drives such as electric motors, the use of hydrogen and synthetic fuels are to be developed.

The day before, Schulte’s Management Board mandate was prematurely extended by five years. Under his leadership, the Cologne-based group successfully launched the “Powering Progress” strategy program last year, according to the company. The company aims to be carbon neutral by 2050.

Above all, Deutz engines drive machines that cause significant CO2 emissions. But Schulte does not want to say goodbye to combustion engine technology just yet: “We will continue to need the combustion engine.”

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The drives are still necessary, especially in agriculture and in the heavy-duty sector, and the transformation towards climate-neutral products is only slowly starting in these areas. Engine production is to be increased to 200,000 units per year – in 2022 Deutz AG had built and sold around 180,000 units.

“Will not build electric motors in Germany”

Deutz AG plans to strengthen and expand its locations internationally. Although Schulte does not share his predecessor’s plans for strong expansion in China, he does not want to completely decouple the company from the People’s Republic. “The Chinese market is indispensable,” says the manager.

Deutz engines primarily drive machines that currently still cause significant CO2 emissions.  But the company does not want to say goodbye to combustion engine technology entirely.  Source: Deutz AG

Deutz AG production

Deutz engines primarily drive machines that currently still cause significant CO2 emissions. But the company does not want to say goodbye to combustion engine technology entirely.

(Photo: Deutz AG)

“One thing is certain: We will not build any electric motors or cells ourselves in Germany, but will buy these components.” Above all, the company’s suppliers are often tied to the Chinese market with regard to electrification. Nevertheless, he does not want to make the company too dependent on China. “The European market is by far the largest for us, followed by the USA.”

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Above all, Schulte wants to expand the European and US American locations, but in the coming decade markets such as India, South America and Africa should also come into focus. The goal: By 2030, Deutz AG wants to be one of the top three independent engine manufacturers worldwide and increase the EBIT margin to eight percent – ​​currently it is six.

The transformation of mobility is an enormous task for the industry and at the same time an economic opportunity, says Schulte. “The industries we serve are in the midst of a fundamental transformation towards more climate neutrality.”

>> Also read: Bosch invests three billion euros in semiconductor business

Schulte has been at the helm of Deutz AG for about a year. The entire board was reorganized last year. Because in the spring of 2022, the management of the engine manufacturer fell out because of the appointment of a woman to the board. It is required by law that listed and co-determined companies with more than three board members have at least one female board member.

Last November, Petra Mayer, a woman, became a member of the Management Board and is responsible for the newly created production department. “I feel like I’ve been working here for ten years,” Mayer explained when the strategy was announced. The previous CEO Frank Hiller and supervisory board chairman Bernd Bohr were replaced. In addition to CFO Timo Krutoff, Markus Müller is now also a member of the Management Board as Chief Technology Officer.

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