Cummins in China

Cummins Inc. is a global manufacturer and servicer of diesel and natural gas engines, known for its commitment to creating cleaner, more efficient power solutions. In China, Cummins established a significant presence through joint ventures with local manufacturers like Dongfeng and Foton, aiming to supply high-quality diesel engines and leverage its global technology for the local market. A major challenge for Cummins in China has been adhering to the evolving air emissions standards amid regulatory uncertainty. The company had to produce engines that were less expensive and more fuel-efficient than their Western counterparts while navigating the complexities of inconsistent implementation schedules for new standards. This regulatory fluidity has made it difficult for Cummins to plan production effectively, risking either non-compliance or unmarketable products.

The company’s management wondered  how should Cummins adapt its strategy to better align with the unpredictable regulatory environment in China? What steps should Cummins take to strengthen its government relations without compromising its ethical standards? How should the company ensure its technological advancements meet local market demands while adhering to global environmental commitments? How should lessons from Cummins's U.S. operations inform its strategy in China, and are these strategies applicable to other emerging markets?