Cummins and Russian Manufacturer KAMAZ Form Joint Venture to Produce Mid-Range Engines

MOSCOW--Jan. 2, 20064, 2006--Cummins Inc. and KAMAZ Inc., the largest vehicle manufacturer in Russia, announced today the signing of a joint venture agreement to produce B Series engines (120-275 horsepower) under the name ZAO Cummins Kama.

The 50-50 joint venture will build on the Cummins and KAMAZ relationship that dates from the early 1980s. Among customers of the new company are KAMAZ trucks and buses, as well as trucks, buses and agricultural equipment produced by other manufacturers in Russia, Belarus and the Ukraine. The engines will be produced in two stages to comply with Euro II and Euro III standards for diesel emissions.

The B Series engines will be manufactured at the joint venture facilities, co-located with KAMAZ in Naberezhnye Chelny, Tatarstan, about 700 miles east of Moscow. The first engines will be assembled in early 2006.

"We are very excited about this new joint venture with our friends at KAMAZ," said Tim Solso, Cummins Chairman and Chief Executive Officer. "Cummins will benefit from its association with this highly respected original equipment manufacturer and its extensive dealer network in the Russian market. KAMAZ will gain from the use of Cummins dependable clean diesel engines and will have access to our new business and manufacturing technologies."

As part of the joint venture agreement, Cummins engines will be serviced through the extensive KAMAZ network of 150 Autocenters, the largest in the Commonwealth of Independent States, as well as the Cummins independent dealer network.

Steve Chapman, Cummins Group Vice President - Emerging Markets and Businesses, and Irek F. Gumerov, Deputy General Director of KAMAZ, signed the joint venture agreement at the KAMAZ offices in Naberezhnye Chelny.

"Two years ago we began selling a six-ton truck to the Russian market, and a Cummins engine was at the heart of our great success with this product," said Sergey Kogogin, General Director of KAMAZ. "Cummins understands the potential of the Russian market and the opportunities that exist with KAMAZ.

"By establishing a joint venture, we have taken the next step toward cooperation. Now we are not just a seller and buyer, but business partners on an international scale," he added.

About KAMAZ

KAMAZ Inc., formed in 1976, is the largest Russian vehicle manufacturer and one of world's top 10. The united production complex of KAMAZ Inc. in Naberezhnye Chelny consists of 13 large special-purpose plants developing, producing, assembling vehicles and components including V8 engines. KAMAZ is an owner of six assembly lines outside of Russia (in Poland, Kazakhstan, Azerbaijan, Ukraine, Ethiopia and Vietnam) and 150 service centers. With production of more than 30,000 trucks per year, KamAZ holds a 37.3 percent market share. In 2004, the KAMAZ Group of companies earned a net profit of 208 million rubles (approximately $7.3 million USD).

In the past 29 years, KAMAZ has produced 1.7 million trucks, ranking it in eighth place in the world in diesel production. It has more than 30 truck models among its product line. KAMAZ has 55,000 employees.

About Cummins

Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins serves customers in more than 160 countries through its network of 550 Company-owned and independent distributor facilities and more than 5,000 dealer locations. With more than 28,000 employees worldwide, Cummins reported sales of $8.4 billion in 2004.