Deutz to enter the Rolls-Royce large engines business

Deutz has signed an agreement with Rolls-Royce that is set to change the technological geography of the propulsion ecosystem. The release reads “Deutz and Rolls-Royce’s Power Systems Business Unit reached a general agreement on the takeover of sales and service operations for various industrial engines in the 5 to 16-liter range with a maximum power output of up to 480kW.”

Mercedes’ shadow lengthens between Deutz and Rolls-Royce 

There is a stone guest: the agreement with Daimler Truck, which has seen the company take 4.19% of the issued capital of Deutz. What will happen when the agreement goes live? We can say that it is definitely the most interesting triangulation of the decade. In fact, the Deutz press release further states “Deutz is taking over the distribution of the mtu Classic series and the mtu engine series 1000-1500, which are based on three Daimler Truck engine platforms. In addition, Deutz is taking over the service operations for engines that are already in service.” And it continues “the takeover provides further evidence of success in implementing Deutz’s Dual+ strategy, which aims to boost the development of a green product portfolio and at the same time optimize and further develop conventional engines. When the strategy was presented in January 2023, the Company announced that it intends to firmly establish Deutz among the top three independent drive manufacturers – including through acquisitions and cooperations.”

On the Rolls-Royce’s side: “In the Power Systems division the focus will be on the strategic growth areas of power generation, governmental, marine, service and the future field of battery energy storage systems.”

Quoting Deutz 

 “With the takeover of the sales and service operations from Rolls-Royce Power Systems, we are taking the next major step towards growth in our business with modern internal combustion engines”, says Deutz CEO Sebastian C. Schulte. “This is an important element that will help us play an active role in the consolidation of the market.” 

And Rolls-Royce

Tufan Erginbilgic, CEO, Rolls-Royce: “This is a clear illustration of our strategy in action. Becoming more focused on the markets where we know Rolls-Royce can win. Power Systems is an integral part of our organisation with a strong brand and real advantage in power generation, governmental and marine end-markets, where we see the strongest demand and an opportunity for better returns from our power-dense and reliable solutions.”

Jörg Stratmann, CEO of Rolls-Royce’s Power Systems: “As we evolve our strategy, we are also constantly analysing our product portfolio. As a result, we will be concentrating largely on higher-powered systems in the off-highway engine sector, primarily from our in-house production. We have therefore decided to transfer our successful lower-power-range engines business, which uses Daimler technology, to a partner.”