Cummins has tied up with China's Foton Motor to build China's largest engine producer with an investment of USD384m according to China's state media.

The 50-50 joint venture, formally launched on Wednesday in a suburb of Beijing, will have a capacity of 400,000 light diesel engines a year, the China Securities Journal reported.

Foton said it would install its engines in its high-end light trucks to help sell up to 200,000 units overseas in 2010.

Production of the 2.8-litre and 3.8-litre engines is expected to come online at the beginning of 2009, marking the first time the models are made outside the United States, Cummins said.

The US company's sales in China topped USD1.7bn dollars last year, jumping 50% from 2006, it added.

The JV project is sited at Changping District of Beijing neighbouring Beiqi Foton Motor covering 170,000 square meters.

As Cummins' first production base outside the United States, the project is aimed to build up a world-class light duty engine producer to pave the way for Beiqi Foton Motor to enter developed markets.

See also: Q&A with Hugh Foden, Cummins Engines