The two firms signed a 15-year co-operative agreement to develop and supply diesel engines with four- to seven-litre displacement for non-automotive and automotive applications in 1998.

Deutz said the reason for the decision to start negotiations to extend the deal four years ahead of its end are due to long development times for the next exhaust gas emission stages for industrial engines and Volvo’s decision to develop their own automotive engine for the next emission stage Euro 6.

Common projects for industrial engines with the exhaust gas ratings COM II, III A, III B and IV (EPA 2, 3, 4 interim and 4 final), and automotive engines with the exhaust gas ratings Euro 3, 4 and 5 are not affected by this decision and both partners are targeting to further increase sales of engines with four- to seven-litre displacement in these segments.