Cummins MerCruiser Diesel and Volkswagen announced a partnership to develop and supply marine engines.

The agreement includes the joint development of marine engines that comply with future Tier 3 emissions standards. Also, all Volkswagen marine engines, starting in 2011, will be exclusively supplied to Cummins MerCruiser Diesel and marketed under its name.

Volkswagen will set up production of the new engine generation at its plant in Salzgitter, Germany.

"This strategic marine business offers significant potential for both partners. We bring to the alliance our technological know-how in engine production and the high quality standard of Volkswagen products," said Werner Neubaurer, a member of Volkswagen's board of management, in a statement. "CMD has expert knowledge of marine applications and is well known for its success in marine engine distribution and service."

"We are delighted with this union," Cummins MerCruiser Diesel president Alex Savelli added in a statement. "It brings together the best minds and capacities in the field of marine propulsion systems."