Research and development

Research and development expenditure (after deducting grants)1)

Chart: Research and development expenditure (after deducting grants)

R&D spending scaled back as planned

Expenditure on research and development in 2015 amounted to €49.5 million (2014: €68.7 million). After deducting grants received from major customers and development partners, expenditure was €40.8 million (2014: €53.1 million). The R&D ratio (after deducting grants), i.e. the ratio of net development expenditure to consolidated revenue, fell marginally as planned to 3.3 per cent (2014: 3.5 per cent). This decrease in R&D expenditure was largely due to all engines for the latest emissions standards, EU Stage IV/US Tier 4, having being launched in the market in 2014. In the year under review, 31.9 per cent of development expenditure after deducting grants was capitalised (2014: 49.5 per cent).

Spending by the DEUTZ Compact Engines segment after deducting grants came to €38.2 million (2014: €48.1 million) and that of the DEUTZ Customised Solutions segment came to €2.6 million (2014: €5.0 million).

Stage V ready

During previous years, we had completely overhauled our engine portfolio for the EU Stage IV/US Tier 4 emissions standards. This has resulted in very compact engines, featuring low lifecycle costs and exhaust aftertreatment designs tailored to customer needs. Our engines in the 2.9 to 7.8 litre cubic capacity range that are equipped with diesel particulate filters already meet the next European emissions standard, EU Stage V, which is expected in 2019 1). There are currently no plans for a further emissions standard in the USA.

We do not anticipate being faced again with such a complex challenge as that presented by the EU Stage IV/US Tier 4 emissions standards in future; rather, we expect to be able to market these engines well into the next decade. Going forward, developments will be influenced to a lesser extent by emissions legislation and, instead, will be driven by business decisions to a greater degree. We will continue to strive for technologically leading designs and to further improve the performance of our engines without increasing their size in future.

Expansion of the product portfolio

We intend to enhance our product range with further developments. One of these is the TCD2.2, a three-cylinder engine that we are developing on the basis of the existing four-cylinder engine with a 2.9 litre capacity. In addition, we will offer smaller engines not only in a diesel variant but also in a liquefied petroleum gas (LPG) variant. The latter is a particularly interesting option for forklift trucks and other material handling applications.

Preliminary development work at a high level

Exhaustive research and development will continue to provide the bedrock for DEUTZ’s position at the forefront of innovation within the sector. Following the successful completion of work on the latest emissions standard, we can now turn our attention to other matters. The focus will be on electronics and software development as well as the enhancement of our exhaust aftertreatment technology in order to further reduce the space required for its installation.

New technical designs

We are constantly developing new, innovative approaches and have recently expanded our activity in the field of alternative fuels. For example, we have developed the prototype for an engine powered by compressed natural gas (CNG), based on the TCD 3.6, and fitted it in a tractor. We carried out this project, which was supported by the German Foundation for the Environment, in cooperation with the University of Rostock and the SAME DEUTZ-FAHR Group. The tractor was showcased at Agritechnica in Hannover in November 2015.

Intellectual property rights safeguard our know-how

We protect our know-how from unauthorised outside use by means of patents, patent applications and utility models. In 2015, we submitted 19 new patent applications, seven of which were in Germany. We now hold a total of 153 patents registered in Germany and 262 registered elsewhere.

1) The EU Commission’s Stage V proposals as published on 25 September 2014.