Deutz creates new 'Green' arm

Deutz is creating a 'Green' business segment which will include all activities connected with development and production of new non-diesel drives.
Ancillary Equipment / November 18, 2021
By Liam McLoughlin
Deutz CEO Frank Hiller says the new business segments will provide a more transparent picture of its work to develop carbon-neutral off-highway technology
Deutz CEO Frank Hiller says the new business segments will provide a more transparent picture of its work to develop carbon-neutral off-highway technology

From January 1st 2022 the off-road engine manufacturer is introducing a new reporting structure and introducing the segments ‘Classic’ and ‘Green’.

The Green segment includes electric drives, the subsidiary Torqeedo, and the battery management specialist Futavis.  

The Classic segment will combine all activities related to the development, production, sales and service of diesel engines.

Deutz says the new reporting structure will give much greater visibility to the development of hydrogen-powered engines and fuel cells.

CEO Dr. Frank Hiller said: “The new segmentation of our commercial operations will, above all, provide the capital markets with a more transparent picture of our work on off-highway technology for a carbon-neutral future. It is backed by a growth strategy that very clearly sets out our milestones and activities in the period up to 2031. At the same time, the new strategy leaves Deutz’s employees in no doubt that the company is fully committed to the transformation of its product portfolio.”

The activities in the Green segment currently generate around €60m per year, equivalent to around 4% of Deutz’s revenue. The company says the intention is to increase this proportion to more than 50% by 2031, both through organic growth and through targeted acquisitions and takeovers focused on the new technologies. Deutz aims for the new segment to reach break-even in 2027.

Strategic investments will also be included in the Green segment, such as Deutz's planned investment in fuel cell manufacturer Blue World Technologies.

Up to 2026, investment in the growth strategy for the Green segment will mainly be funded by the traditional business with diesel engines. Hiller commented: “Internal combustion engines will be in demand in our application areas for many years yet. We are a global leader in agricultural machinery and construction equipment, and more and more of our customers are showing interest in long-term partnerships.”

Deutz recently announced new alliances with John Deere, SDF and AGCO that will see it either develop or manufacture entire engine series for these agricultural machinery players.

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