Opportunities report

In the fast-paced, dynamic markets in which the DEUTZ Group operates, there are, in addition to the aforementioned risk factors that can negatively impact on the attainment of the business objectives, also opportunities that can have a positive effect on the business objectives of the Group for 2019 and beyond. Identifying and harnessing these opportunities is the responsibility of the individual operating segments of the Group. Unlike risks, opportunities are not collated and assessed centrally.

Unless otherwise stated, the opportunities described below refer to 2019 and relate to the DEUTZ Compact Engines and DEUTZ Customised Solutions segments.

Three-pillar growth strategy in China

Because of its size and rate of growth, China – the world’s largest individual market – is a very promising sales market. That is why we have reorganised our market presence in China. Our planned alliances with SANY, HORIZON and BEINEI will give us the ideal local production and service network and, at the same time, expand our customer base. We will further strengthen our business with enhanced digital solutions. By realigning our business in China, we can benefit more from the growth of this market and increase our revenue. On this basis, we are aiming to generate revenue in China of around €500 million in 2022. 1)

Research and development

Increasingly stringent emissions standards and general technological progress are placing huge demands on our entire industry. We are one of the innovation leaders and have a very strong competitive position thanks to our proven expertise, our many years of experience and our efficient processes in the research and development of innovative drive systems. We will continue to reinforce our strong competitive position by developing gas engines with a capacity of up to 4 litres, expanding our portfolio of products with a capacity of over 4 litres and developing hybrid and all-electric drives. Following a development period of just six months, we unveiled the first prototypes at the ELECTRIP Event Week in September 2018. The acquisition of Torqeedo and successful knowledge transfer has given us a five-year head start in terms of development.

New trends

Diesel technology is currently the subject of much debate. We firmly believe that diesel technology will continue to be the dominant type of drive in off-highway applications for a long while yet. However, the discussion is making potential customers who, until now, have invested in their own diesel development work, more willing to collaborate with us instead. This creates a tremendous opportunity for us. Although we continue to have faith in diesel, we are also investing in other innovative technologies and the debate about diesel is opening up good opportunities to pursue new and innovative approaches – which is what our E-DEUTZ strategy is all about. In 2018, we opened an innovation centre that will provide further support for our innovation processes. This includes the possibility of tapping into new markets and customer groups by offering innovative solutions on a much bigger scale.

Services and digitalisation

We intend to significantly expand our high-margin service business. Potential for growth may stem from offering new service products, broadening our service network and acquiring dealers. Opportunities are also presented by new sales channels, such as online shops, and digitalisation. Our DEUTZ Connect app, which we brought out in 2017 and will continue to add to, gives users access to engine diagnostics. This creates greater customer loyalty and satisfaction and has the potential to increase efficiency. In 2022, we want to generate revenue of more than €400 million from our service business.

1) DEUTZ is still examining whether this revenue will be fully consolidated.