Tognum aims to expand market share

Since the sale of the Off-Highway division by DaimlerChrysler AG to EQT, a Swedish financial investor, the Tognum holding company is the group with globally leading companies and brands for diesel and gas engines as well as for complete propulsion systems for ships, heavy land and rail vehicles, industrial propulsion systems and

decentralized energy systems. Tognum will make additional investment of ?50 million by the end of 2007. The previously planned investment volume of approximately ?85 million has therefore been increased by well over 50%. The business plan jointly drawn up by Tognum?s management and employee council together with EQT focuses on an

expanded product and market offensive by the companies MTU Friedrichshafen, MDE Dezentrale Energiesysteme (in Augsburg) and injection specialist L?Orange (which has facilities in Stuttgart and the town of Glatten). In addition, expenditure on research and development in the coming years will increase significantly to more than ?130 million.

“This expanded investment program will enable our group of companies to achieve additional organic and profitable growth in lucrative market and product segments,” explained Tognum CEO Volker Heuer. At the same time, EQT?s willingness to invest shows that “our shareholders and management have put a solid strategy in place for Tognum?s long-term growth and value creation. The commitments made at the time of the acquisition at the beginning of this year will thus be completely fulfilled.”

MTU Friedrichshafen is working aggressively and effectively on penetrating new market segments worldwide with innovative products and an expanded portfolio. A strategically important move in this context is the rapid expansion of production and assembly capacities, especially at the plant in Friedrichshafen. “Our highly successful market entry with new variants of the Series 2000 and Series 4000 diesel engines ? for use for example in the fields of oil and gas production and construction equipment ? has generated a

significant increase in demand, which we will meet by expanding our production capacity,” stated Heuer. The production of engines for the market segments of rail, ships and power generation has been running at full capacity for several months. MTU will therefore substantially increase its production capacity by the end of 2007 for the Series 2000 and the Series 4000 by one third from the present level of approximately 6,000 units.

This production expansion will also have positive employment effects for the group?s production plants in Detroit and Suzhou. In these factories, the Series 2000 is assembled for local markets in the United States and China ? the main components are delivered from Friedrichshafen. At MTU?s main plant in Friedrichshafen, an additional 120 jobs will be created by the end of 2007.

“We are thus strengthening our facilities in Friedrichshafen with high investment and jobs for highly qualified employees, mainly from the surrounding region,” pointed out Heuer. MTU Friedrichshafen is also very active in the field of employee qualification, and plans for a total of 100 new apprenticeships and traineeships in 2007 alone ? about a quarter more than this year.

Due to the ongoing positive course of business in all the divisions, Heuer is looking forward to new record revenues for the Tognum group of companies: “With a continuation of our strong business, we should achieve revenues of more than ?2.4 billion this year.” This would be an increase of 20%. In the year 2005, the former MTU Group ? then the Off-Highway division of DaimlerChrysler AG, posted total revenues of more than ?2 billion.