Xi'an Cummins Engine Company Starts Production of Cummins ISM 11-Liter Engine

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XI'AN, China--(BUSINESS WIRE)--

Xi'an Cummins Engine Company Limited (XCEC), a 50/50 joint venture between Cummins Inc. (NYSE:CMI) and China's Shaanxi Automobile Group Company Limited (Shaanqi Group) today officially began production of the Cummins ISM 11-liter heavy-duty engine.

The ISM is one of the flagship engines of Cummins' heavy-duty product line. In addition to proven fuel economy and dependability, the ISM meets the toughest emission standards worldwide, including EPA 2007 and Euro IV. With a power range from 335 to 440 horsepower, the ISM is the ideal power choice for heavy-duty vehicles with gross vehicle weight between 26 and 44 tons - including trucks, long-distance coaches and double-decker buses.

The market for heavy-duty trucks in China with payloads greater than 15 tons is expected to be around 200,000 units by 2010. With $24 million initial investment from both sides, XCEC's projected production capacity is 50,000 units by 2010.

"The demand in China for high-performance and environmentally sound heavy-duty truck engines is growing quickly, and XCEC will enable Cummins to compete for a leadership position in this market," said John Watkins, Cummins Vice President - Managing Director East Asia. "By combining our technology with a strong local partner, which offers a significant OEM base for our products, Cummins is poised to significantly expand its portfolio of engine products in the important China market."

Jim Kelly, President - Cummins Engine Business, said the joint venture will bring a world-class engine to the China market while also expanding Cummins' long-standing presence in the country.

"Since the 1980s, the ISM has consistently proven itself with the most demanding heavy-duty truck customers in the world, and we're excited about the chance to extend the Cummins product line in China," Kelly said. "Our already broad product line in China will be strengthened by this partnership, which will provide heavy-duty customers in China with a top-of-the-line engine choice."

Shaanqi Group, headquartered in Xi'an, the capital city of western China's Shaanxi Province, is the leading producer of heavy-duty trucks (payload above 15 tons) in China. Shaanqi, which has been buying a small number of imported ISM engines from Cummins since late 1990s, will be the largest customer for the engines produced by the joint venture. The Cummins East Asia marketing organization will handle non-Shaanqi sales of ISM engines made at the new plant.

"Today is an important milestone in Shaanqi's history of international cooperation, which dates back to the 1980s," said Zhang Yupu, Chairman of Shaanqi Group. "Shaanqi is a leader in China's heavy-duty truck market and Cummins is a leading diesel maker worldwide with a solid footprint and long-term commitment in China. Our cooperation is a win-win for both sides."

Heavy-duty trucks with payload above 15 tons and engine power above 300 horsepower are part of China's "Tenth Five-Year Plan". With the world's second-longest highway system, behind only the United States, and robust GDP growth, China's heavy-duty trucking industry has seen rapid development since 1999.

    About Shaanxi Automobile Group Company Limited (Shaanqi Group)

Shaanqi Group is the one of the leading producers of heavy-duty vehicles in China. Shaanqi's product line includes off-road vehicle, heavy-duty and medium-duty trucks, and high-end bus chassis. With 15,000 employees, Shaanqi produced over 35,330 vehicles in the first half of 2007, up nearly 80 percent compared with the same period of 2006. Further information can be found in Shaanqi's website at www.sxqc.com

About Cummins in China

Cummins is the largest foreign investor in the China diesel engine industry. The Company's ties to the country date back to 1975 when then-CEO J. Irwin Miller led the first Cummins delegation to Beijing, making him one of the first American business leaders to seek opportunities in China.

Cummins began licensing its engine technology in China in 1981 and formed its first joint venture in the country in 1995. Today, Cummins operates more than 20 facilities in China with more than 5,400 staff, 12 distributor locations, one regional R & D center and 13 manufacturing plants producing eight of the fourteen Cummins engine families, turbochargers, filters, exhaust systems, fuel systems, alternators and gensets, with all areas of the Company's business represented in China. Sales in China exceeded $1.1 billion in 2006.

About Cummins

Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins serves customers in more than 160 countries through its network of 550 Company-owned and independent distributor facilities and more than 5,000 dealer locations. Cummins reported net income of $715 million on sales of $11.4 billion in 2006. Press releases can be found on the Web at www.cummins.com.

Information provided in this release that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in Cummins Securities and Exchange Commission filings.

Source: Cummins Inc.

Released August 9, 2007