Cummins Signs Memorandum of Understanding to Form Diesel Engine Joint Venture in Vietnam

Download as PDF

NEW YORK--(BUSINESS WIRE)--

Cummins Inc. (NYSE:CMI) today announced that it has signed a Memorandum of Understanding with Vietnam Motors Industry Corp. (Vinamotor) to create a 50-50 joint venture to produce on-highway diesel engines in Vietnam.

The Memorandum of Understanding (MOU) was reached Sept. 21 in Hanoi by Cummins Chairman and CEO Tim Solso and Nguyen Van Khoa, Chairman of Vinamotor.

The agreement was commemorated today at a signing ceremony in New York City in the presence of Prime Minister Nguyen Tan Dung of the Socialist Republic of Vietnam. Chairman Nguyen represented Vinamotor and Steve Chapman, Group Vice President - Emerging Markets and Businesses represented Cummins.

Vinamotor, a government-owned company, is the largest commercial vehicle producer in Vietnam, which currently has no local engine production. The MOU outlines the parameters of the joint venture, which is contingent on the satisfactory results of a feasibility study, which Cummins expects to be completed in January 2008.

Financial terms of the deal have not been set and no timetable for completing the joint venture agreement has been established.

Under the terms of the MOU, the joint venture would take a phased approach to producing Cummins-designed engines in Vietnam: Initially, engine kits will be imported for assembly and distribution in Vietnam with local components ultimately being used in production as the supply base in Vietnam develops.

"Vietnam is one of the fast-growing economies in Asia, and this deal would position Cummins to capitalize on that growth," said Solso. "Cummins has a history of working well with local partners, as our success in China and India has shown, and we are excited about the prospects of teaming with Vinamotor to bring Cummins' engine technology to Vietnam."

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 September 28, 2007