FRANKFURT — German truckmaker MAN AG is throwing in the towel in its months-long quest to buy Swedish rival Scania AB — adding it would instead pursue a friendly partnership with the growing company.

The board of Volkswagen AG, Scania’s largest shareholder (and investor in MAN), had rejected the German company’s $13.3 billion hostile takeover bid, but reportedly would continue to discuss “a friendly combination of MAN AG, Scania AB and Volkswagen Heavy Trucks.”

Scania recently announced plans to increase production capacity from 70,000 to 100,000 vehicles until 2010 in part to meet eastern European demand.

Meanwhile, according to a upcoming report by Euro am Sonntag, citing unnamed sources, MAN AG could now turn its attention on a joint venture with Chicago-based truck and engine maker Navistar.

A source told the magazine that “‘If Scania does not work out, then the Navistar theme will be pushed. That is plan B.”

Last summer MAN Chief Executive Hakan Samuelsson told a Swedish newspaper he intends to continue growing his company’s relationship with Navistar, and perhaps look into grabbing a stake in Navistar, which produces International brand trucks.

“We find Navistar interesting. I think that we should over time cement somehow our cooperation, including by becoming part owners,” Samuelsson was quoted as saying.

Navistar and MAN already have a joint strategic agreement to collaborate on design, development, sourcing and manufacturing of diesel engines, as well as components and systems for commercial trucks. Last year, International unveiled its first proprietary heavy-duty, big-bore engine, which is based off of MAN’s European D20 engine.

— with files from Associated press