TAFE Motors, German firm DEUTZ to make diesel engines in Rajasthan

Chennai-based tractor maker TAFE Motors and Tractors Ltd (TAFE Motors) has signed a deal with German internal combustion engine (ICE) maker DEUTZ to produce diesel engines at the former’s plant in Alwar, Rajasthan.

DEUTZ chief executive Sebastian C. Schulte and TAFE Motors chairperson and managing director Mallika Srinivasan signed the cooperation agreement in Cologne on Tuesday.

Initially, TAFE Motors will make up to 30,000 DEUTZ engines in 2.2 liter (50-75 hp) and 2.9 liter (75-100 hp) under license. They will subsequently manufacture engines made by DEUTZ group across emission standards. Both companies will primarily cater to India and neighboring markets in the Asia-Pacific region.

TAFE Motors is a subsidiary of TAFE and the third largest tractor manufacturer in the world. In 2023, the Indian economy grew by 6-7 %, DEUTZ said in a press release, adding that India’s gross domestic product will quadruple by 2050, with the agricultural and construction sectors driving some of this robust growth.

“The strategic cooperation with TAFE Motors secures DEUTZ access to growing markets with strong potential and long-term prospects,” Schulte said.

It also enables DEUTZ to continue producing at competitive costs in the future and makes the company less dependent on the existing supplier landscape, which is becoming increasingly challenging due to the technological shift and geopolitics, he added.

The cooperation will cut the diesel gen-set maker’s dependence on supply chains in geopolitically tense regions – without sacrificing the corresponding cost benefits, and this tie-up will help DEUTZ’s German production sites, the company said.

Sandeep Sinha, CEO of TAFE Motors, said, “This strategic cooperation will be mutually beneficial as it will offer access to shared resources and technologies to produce engines that complement TAFE Motors’ and the Group’s existing range to meet the demand for both domestic and international markets.”

Sinha said the cooperation will also offer DEUTZ access to high-quality engines at the best cost for new applications in Indian and relevant overseas markets, as the German diesel engine maker mentioned in its release.