Cummins, Scania Form Joint Venture to Produce Next-Generation Fuel Systems.

COLUMBUS, Ind. -- Cummins Inc. (NYSE:CMI) and Scania CV AB announced today that the companies have signed a joint venture agreement to produce next-generation fuel systems for heavy-duty on-highway trucks.

Cummins-Scania XPI Manufacturing LLP is a 50-50 joint venture, which builds on Cummins-Scania partnerships on fuel systems development and manufacturing that date to January 1992. The two companies currently work together in Columbus to produce the HPI fuel system, which eventually will be replaced by the XPI (Xtra-High Pressure Injection) system.

The XPI common rail fuel system is expected to be manufactured by the joint venture company located at the Cummins Fuel Systems facility in Columbus and at the Cummins plant in Juarez, Mexico.

"The XPI system represents the leading edge of fuel systems technology and is a continuation of our strong relationship with Scania," said Cummins President and Chief Operating Officer Joe Loughrey. "The XPI system will be instrumental in allowing Cummins to meet future EPA on-highway requirements and in keeping Cummins at the forefront of emission technology."

Cummins CEO Tim Solso and Leif Ostling, president and CEO of Scania, signed the joint venture agreement at Cummins headquarters. The initial investment in the new company is expected to be $31 million, split evenly between the partners.

"From Scania's side, we are glad to be able to present the new joint venture. It is a natural development of our long-standing and successful cooperation with Cummins regarding the HPI system, our current high-pressure injection system. The XPI system will enable us to offer customers the best possible operating economy and to reduce emission levels beyond what is possible with existing technology," says Hasse Johansson, Group Vice President and head of Research and Development at Scania.

The first XPI systems will be produced in early 2006. The new product is expected to eventually result in a small number of new jobs at the Fuel Systems plant in Columbus.

About Scania

Scania is one of the world's leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. A growing proportion of the company's operations consist of products and services in the financial and service sectors, assuring Scania customers cost-effective transport solutions and maximum uptime. Employing 30,000 people, Scania operates in about 100 countries. Research and development activities are concentrated in Sweden, while production plants are located in Europe and South America, with facilities for the global exchange of both components and finished vehicles. In 2004, invoiced sales totaled SEK 56.7 billion and net income amounted to SEK 4.1 billion.

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. Press releases can be found on the Web at www.cummins.com.