BEIJING (AFX) - Dongfeng Cummins Engine Co Ltd (DCE), a 50-50 joint venture between Dongfeng Motors and US-based Cummins Inc, has signed an agreement to make Cummins Westport Inc natural gas B-series engines in China, Cummins Westport said.

DCE is expected to start manufacturing the engines in the central province of Hubei at the beginning of 2006.

"Cummins Westport has a strong presence in China with its natural gas engines powering transit buses in cities such as Beijing, Xian, and Urumqi," Cummins Westport president Guan Saw said in a statement.

"The next logical step is to manufacture locally in China in order to access a broader customer base, and to continue to lower product cost," he added.

Cummins already has a license agreement with DCE to manufacture B and C diesel engines in China, and the company produced over 120,000 engines in 2004, Cummins Westport said.

DCE, which was established in 1996, will use its existing assembly line for the production of the B-series engines.

Cummins Westport, a 50-50 joint venture between US-based diesel engine manufacturer Cummins Inc and Canada-based alternative fuels engine technology company Westport Innovations Inc, said it will also market the B-series engines to other manufacturers in China and investigate opportunities for export. will.davies@xinhuafinance.com