WARRENVILLE, Ill. — Navistar International says its combined truck and engine business will rake in $15 billion in revenues with 10 percent segment margins by 2009.

In an update to the investment community on the company’s strategies and operating metrics, including the outlook for 2006, Navistar President and CEO Daniel C. Ustian, said the truckmaker is aggressively implementing a plan to “make this strategy a reality” by “leveraging what we have and utilizing what others have built.”

“Our company continues to capitalize on the strength of the industry and to build on our core business through growth in markets that are counter cyclical to our heavy truck business such as the military,” Ustian said.

The company has introduced eight new vehicles in the past 18 months, all built off of existing platforms, giving the company the opportunity to capture additional market share in niche markets with minimal investment, says Ustian. In addition, the new ProStar flagship heavy truck, which is scheduled to go into production later this year, has already received rave reviews from dealers and trade media, he said.

International says interest in ProStar will
help soften ’07 industry slump

Ustian added that joint ventures and collaboration with other manufacturers also give the company the ability to achieve additional scale.

“India is one of the fastest growing truck markets today and through our joint venture with Mahindra and Mahindra, we are developing new trucks and buses for that market and we will be able to leverage our combined extensive distribution network to reach other parts of the world,” Ustian said. “Our collaboration with MAN AG of Germany in the development of our own MaxxForce big bore engine represents another key step in allowing us to control our own destiny.”

International’s MaxxForce heavy-duty highway engine is scheduled to be launched at the end of 2007.

“There has been much speculation about an anticipated market decline in 2007 because of increased 2006 buying ahead of the stricter emission regulations that go into effect at year end,” Ustian said. “Regardless of overall market conditions, we should have an edge on the competition because we will be introducing two products that offer new and exciting features as well as improved fuel economy. The ProStar debuts at the beginning of 2007 and our MaxxForce big bore engine will debut at the end of 2007. ”

Recently, MAN said it intends to continue growing its relationship with Navistar, and speculated perhaps venturing overseas and grabbing a stake in the American firm.

Chief Executive Hakan Samuelsson made the remarks in an interview with a Swedish newspaper, but said added no official talks with Navistar were under way. “We find Navistar interesting. I think that we should over time cement somehow our cooperation, including by becoming part owners,” Samuelsson said.

Worldwide shipments of International brand medium and heavy and severe service trucks and IC brand school buses during the first six months of fiscal 2006 totaled 63,400 units, a gain of 3.7 percent over the 61,100 units in the first six months a year ago. Combined market share for the second quarter was 27 percent, the same as for all of fiscal 2005 and nearly 3 percentage points higher than in the first quarter of 2006.