New markets Deutz considers entering defense and power supply

Source: dpa 1 min Reading Time

The engine manufacturer Deutz can envision entering the defense sector and decentralized power supply, as dpa has learned.

Deutz, primarily known for its engines and agricultural machinery, is currently considering whether entering the defense technology sector and making a foray into decentralized power supply might be worthwhile ...(Image: Deutz)
Deutz, primarily known for its engines and agricultural machinery, is currently considering whether entering the defense technology sector and making a foray into decentralized power supply might be worthwhile ...
(Image: Deutz)

According to the latest information, Deutz is considering supplying engines for wheeled tanks, armored personnel carriers, and supply vehicles, as reported by Welt am Sonntag following a conversation with CEO Sebastian Schulte. Battery storage systems for the stationary supply of field hospitals could also be a future business. For Deutz CEO Schulte, this is an attractive field that the turning point brings with it. The plans in the field of emergency power supply are even more concrete compared to the defense topic. The market for emergency power units, which are still run on diesel today, is growing, according to Schulte.

Deutz competes with Cummins and Caterpillar

Curiously, this is even a consequence of the energy transition, as especially in countries like the USA, where power grids are in a dilapidated state, certain regions may experience power outages multiple times a month. So far, Deutz only supplies engines to manufacturers of such units, which are needed in places like hospitals, cooling facilities, and data centers. In the future, however, the complete system is to come from Deutz. The two much larger US competitors, Cummins and Caterpillar, are already strongly represented in this business. With a broader setup, Deutz might also become more resilient to economic fluctuations. The weakening economy had burdened demand at the start of the year.

Ukrainekrieg befeuert die Waffenschmieden

In all these strategic considerations, the defense sector currently seems particularly attractive. Because of Russia's war of aggression against Ukraine, Western states have significantly increased their defense budgets. Billions are currently being poured into the procurement of tanks, air defense systems, and the necessary ammunition. In mid-June, Estonia's Defense Minister Hanno Pevkur appealed to NATO partners to spend a larger share of their national economic output on defense each year.

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