Cummins to Produce High-Performance, Light-Duty Diesel Engines; Company to Partner with Major Automotive Manufacturer

COLUMBUS, Ind.--July 26, 2006--Cummins Inc. today announced it has reached agreement with a major automotive manufacturer serving the North American market to produce and market a light-duty, diesel-powered engine. For competitive reasons, Cummins' original equipment manufacturer partner in the venture has asked to remain confidential.

As part of the agreement, Cummins will develop and manufacture a family of high-performance, light-duty diesel engines for a variety of automotive applications in vehicles below 8,500 pounds gross vehicle weight, including standard pickup trucks and sport utility vehicles. Certain bus, marine and industrial applications also will be served by this engine family.

The first vehicles with this engine are expected to be ready for market by the end of the decade. Cummins anticipates that this diesel engine will provide an average of 30 percent fuel savings, depending on the drive cycle, over gasoline-powered engines for comparable vehicles.

The concept for this product is the result of a nine-year partnership between Cummins and the U. S. Department of Energy. The DOE contract began in 1997 because of the federal agency's ongoing interest in energy efficiency in the automotive market.

"This agreement gives the driving public an even greater opportunity to experience the benefits of a new class of vehicles powered by a high-performance, fuel-efficient, clean diesel engine made by Cummins," said Tim Solso, Cummins Chairman and Chief Executive Officer. "This line of diesel engines also will fuel the growth of an exciting new market in which Cummins does not currently participate."

Cummins has not yet selected a manufacturing site for the new engine, but after an extensive search has narrowed the candidates to a short list of states.

"Cummins is looking for a community that has a cost-competitive, suitable facility and the right resources available," said Jim Kelly, President of the Engine Business. "We also will seek state and local economic incentives from the states that are candidates for this business."

Cummins expects to have added 600 new jobs approximately two years after product launch. Further growth will depend on volumes.

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. Cummins reported net income of $550 million on sales of $9.9 billion in 2005. Press releases can be found on the Web at www.cummins.com

Forward-looking statements disclosure

Information provided and statements in this release that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in Cummins Securities and Exchange Commission filings.