Research and development
Research and development expenditure (after deducting grants)1)
1) Spending on research and development after deducting grants received from major customers and development partners.
R&D expenditure at prior-year level
Expenditure on research and development in 2014 amounted to €68.7 million (2013: €71.1 million). After deducting grants received from major customers and development partners, expenditure was €53.1 million (2013: €52.6 million), meaning that development expenditure after deducting grants was on a par with 2013. The R&D ratio (after deducting grants), i.e. the ratio of net development expenditure to consolidated revenue, fell marginally as planned to 3.5 per cent (2013: 3.6 per cent). In the year under review, 50 per cent of development expenditure after deducting grants was capitalised (2013: 64 per cent).
Spending by the DEUTZ Compact Engines segment after deducting grants came to €48.1 million (2013: €48.8 million), that of the DEUTZ Customised Solutions segment came to €5.0 million (2013: €3.8 million).
Successful launch of EU Stage IV/US Tier 4 products
In 2014, we gave series production approval to all of our engines that are designed to meet the latest EU Stage IV/US Tier 4 emissions standard and that had still been awaiting approval. During the previous years, DEUTZ carried out a complete revision of its entire engine portfolio in order to meet this emissions standard. This has resulted in very compact engines, featuring low lifecycle costs and exhaust aftertreatment designs tailored to customer needs. To some extent, it was this emissions standard that made it essential for exhaust aftertreatment systems to be installed in the engines. We do not expect to be faced with such a complex challenge again in future; instead, we expect to be able to market these engines well into the next decade.
Stage V ready
We aim to continue pursuing technologically leading designs with our engines. 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 20192). Certification will follow as soon as possible. There are currently no plans for a further emissions standard in the USA. Going forward, we intend to continue improving engine performance for the same engine size and thus actively accelerate the trend towards downsizing. Our exhaust aftertreatment concept – DVERT or DEUTZ Variable Emissions Reduction Technology – offers our customers exhaust aftertreatment design modules tailored to their needs. Our portfolio already includes a diesel particulate filter for all the above-mentioned engines.
Preliminary development work expanded
Exhaustive research and development will continue to provide the bedrock for DEUTZ’s position at the forefront of innovation within the sector. However, following the successful introduction of the latest emissions standard, there is now a possibility that spending on development can be slightly reduced. We will therefore reduce the number of employees in R&D this year. The main focus of attention is also shifting from the development of new engines and the refinement of existing models to support for existing engine series and preliminary development. Development of new engines and the refinement of existing models accounted for some 77 per cent (2013: 86 per cent) of all R&D expenditure (after deducting grants); support for existing engine series including customer applications took up 14 per cent (2013: 10 per cent) and 9 per cent (2013: 4 per cent) was spent on preliminary development work.
Further development of specific functionalities
We intend to add further new developments to our product range. For example, the production launch of the TCD 3.6 High Torque with an output of less than 56kW (EU Stage IV/US Tier 4) is planned for this year. This engine, with its torque curve optimised in the low to medium engine speed range, gives customers the same performance (torque) as engines of the same design but with a higher output. This plus point is achieved through a more compact, less complicated exhaust gas aftertreatment system. The considerable practical advantages of this design can be seen in applications with limited installation space, tractors for example.
New technical designs
We are constantly developing new, innovative approaches and have recently expanded our activity in this area. Last year, for example, together with TEREX Fuchs and supported by the Federal Ministry for Economic Affairs and Energy, we fitted a hybrid system to a material handler and ran it as a prototype. Whereas hybrid systems are now firm fixtures in the automotive industry’s product range, they are still only found as prototypes or potentially as small-scale production runs in the construction equipment sector. The special characteristics of the hybrid system we developed are the dynamic reduction in the diesel engine’s engine speed, energy recuperation and a start-stop function. During the testing carried out so far, fuel savings and reductions in CO2 emissions of over 40 per cent have been achieved; the test driver was also highly enthusiastic about the system’s performance.
Continuous process optimisation
Because of the constantly growing complexity of the systems under development, we are systematically and continuously improving our processes. These new high-grade systems can, as a result, be developed at an acceptable cost and to the existing high quality standards. The volume of data to be stored in the electronic control system has multiplied greatly, precisely because of the demands imposed by the management and regulation of the combustion engine and the subsequent exhaust aftertreatment system. We have developed and implemented a new dataset development process including integral validation to cope with this increase.
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 2014, we submitted 19 new patent applications, seven of which were in Germany. We now hold a total of 168 patents registered in Germany and 261 registered elsewhere.
2) EU Commission’s proposal for EU Stage V published on 25 September 2014.