LISLE, Ill. – Volkswagen has bought its way into the North American truck market, taking a 16.6% stake in Navistar.
The strategic alliance was announced this morning. Volkswagen Truck and Bus will invest US$256 million in Navistar and will appoint two directors to its board.
“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.”
“Closer collaboration among our existing brands was a top priority for our commercial vehicles business and we are well on track in this context,” added Andreas Renschler, CEO of Volkswagen Truck & Bus and member of the Board of Management of Volkswagen AG responsible for commercial vehicles. “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.”
The two companies said adding global scale will deliver cost savings for both companies.
“We believe working collaboratively, the two companies can optimize the capital and engineering expenditures associated with next-generation truck and bus engine development, while providing both Navistar and Volkswagen Truck & Bus with opportunities for substantial procurement savings. This alliance marks another step in Navistar’s journey to be a stronger, more profitable company,” said Walter Borst, executive vice-president and chief financial officer with Navistar.
The deal includes a procurement joint venture, which will allow the companies to source parts collectively. The two truck makers will also share technologies and collaborate in the development of advanced driver assistance systems, connected vehicle solutions, platooning and autonomous technologies, electric vehicles and cab and chassis components.
More information about the alliance will be revealed during a conference call this morning.