Navistar announces VW alliance

Volkswagen Truck & Bus has acquired a stake in Navistar, opening up a new strategic alliance between the two truck manufacturers

US truck maker Navistar has entered into a cooperative tie-up with global commercial vehicle heavyweight Volkswagen Truck & Bus, with the latter taking a 16.6 per cent stake in the US-headquartered operation.

The deal is said to be worth $US256 million (approximately $A333 million), and Navistar – the company behind historic truck brand International – says it expects the collaboration will realise synergies of $US500 million (approximately $A650 million) over the next five years.

Described as "a wide-ranging strategic alliance", the tie-up involves frameworks for technology and supply collaborations along with a procurement joint venture.

In addition to enhancing Navistar's products and services through access to Volkswagen's extensive products and components portfolio, the deal will boost Navistar's liquidity. It will also improve the purchasing power of Volkwagen Truck & Bus's three major truck brands: Scania, MAN and Volkswagen Truck & Bus.

"We are very pleased to partner with a global leader who shares our view of the world, in an alliance that will deliver multiple benefits and is consistent with our open-integration strategy," said Troy Clarke, President and CEO, Navistar.

"Starting in the near term, this alliance will benefit our purchasing operations through global scope and scale. Over the longer term, it is intended to expand the technology options we are able to offer our customers by leveraging the best of both companies and enabling Navistar to deliver enhanced uptime.

"Volkswagen Truck & Bus's equity investment will strengthen our liquidity position and expand our financial flexibility, while aligning us with a valuable strategic partner."

Andreas Renschler, CEO of Volkswagen Truck & Bus and member of the Board of Management of Volkswagen AG responsible for commercial vehicles, said the deal would reap major benefits for both entities.

"Closer collaboration among our existing brands was a top priority for our commercial vehicles business and we are well on track in this context," he said.

"We are now taking the next step on our way to becoming a global champion in the commercial vehicles industry. The strategic alliance with Navistar is an important milestone and will be very beneficial for both sides."

Navistar says the partnership will focus on powertrain technology and will explore "all aspects of commercial vehicle development", including advanced driver assistance systems, connected vehicle technology, platooning and autonomous vehicle technology, and electric vehicles.

The deal gives Navistar a welcome financial boost after some tough economic times, while also furthering Volkswagen's ambitions to become the dominant global truck manufacturer, as it seeks to gain the competitive edge against fellow trucking behemoths, Daimler and PACCAR.

Navistar announces VW alliance

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