Cummins Inc has announced that the conclusion of its joint ventures with Fiat subsidiaries CNH Global N.V. (CNH) and Iveco N V.
As part of the termination agreement between the companies, Cummins will acquire CNH's 50-per cent stake in Consolidated Diesel Company (CDC) and will sell its one-third holding in the European Engine Alliance, which will now be wholly managed by Fiat's engines and transmission division, Powertrain Technologies.
Despite the split the companies will continue as mutual partners through their individual alliances with Tata Motors to whom Cummins supplies engines for commercial vehicles, a segment in which the Indian firm's heavy commercial vehicles division is looking for an alliance with Iveco for some of its high-end vehicles in India.
According to Anant Talaulicar, managing director, Cummins India, in the last 15 years Tata Motors and Cummins have had a non-exclusive partnership that has allowed the two to compete and the global decoupling between Cummins and Fiat should not Tata Motors.
In the passenger cars segment, Tata Motors has an alliance with Fiat for cars and engines and aso markets the Italian car maker's vehicles in India since 2006, its alliance with Cummins since 1993 to manufacture Cummins diesel engines for all Tata vehicles will continue till 2014 since its renewal in 2004.
Cummins and Case Corporation entered in to a joint venture in 1980 that led to the creation of CDC, which has produced more than 2.7 million mid-range engines.
The European Engine Alliance (EEA) was established in 1996 as a joint venture between Cummins and two Fiat Group companies, Iveco N V and New Holland, now now CNH Global N V, to develop a new generation of 4- , 5- and 6-litre engines Cummins will sell its one-third interest in the EEA to Fiat Powertrain Technologies.
''We have enjoyed a long and successful relationship with our partners," said Jim Kelly, president of Cummins Engine Business. "This change will essentially be transparent to the CDC employees and to our customers. On 1 July we celebrated the 25th year of CDC's successful production of engines and components with our employees there, and we look forward to continuing this success together well into the future. Our customers can continue to depend on Cummins and CDC for the quality products and support they have always received.''