LISLE, Ill. — Navistar International posted a US$374 million loss in the second quarter, the result of reduced sales and high warranty costs related to its pre-SCR MaxxForce engines.

However, Navistar reported it is pleased with the progress it has made in its turnaround plan and announced it will be adapting its medium-duty products to use Cummins SCR.

“We are not satisfied with our overall financial results this quarter, but we are pleased with the continued progress we made in a number of areas on our turnaround plan,” said Troy A. Clarke, Navistar president and chief executive officer. “We still face some significant, yet solvable challenges, primarily in the areas of higher pre-existing warranty costs for our earlier EPA2010 emissions level engines, as well as in rebuilding sales and restoring market share. However, we are already implementing the right leadership and business process changes to effectively address these priority issues.”

Clarke pointed out Navistar hit its deadlines for launching the ProStar with Cummins ISX15 as well as the MaxxForce 13 with SCR.

“We delivered on a number of our near-term priorities this quarter. We exceeded our cash guidance, continued to over-achieve on our structural cost reduction efforts, and obtained regulatory approval for our MaxxForce 13-litre engine with SCR, which we launched on time in our ProStar truck the last week of April,” Clarke added. “We were also pleased with our ongoing progress in shedding non-core assets that are not providing adequate returns on investment.”

“Our new SCR-based heavy-duty offerings are the highest quality trucks we have built in more than a decade and they have improved fuel economy, a combination that positions us to hit our previously stated goal of stronger sales and increasing market share during the second half of 2013 and into 2014,” added Jack Allen, Navistar’s chief operating officer. “We are off to a strong start as May orders were up 38% versus the average sales rate for the previous quarter, driven higher by strong interest in the MaxxForce 13-litre with SCR and the ProStar ISX.”

With its heavy-duty launches completed, Clarke said the company is turning its focus to adding SCR aftertreatment to its medium-duty products. Navistar announced it will use Cummins SCR on medium-duty engines, which it will begin to make available in the first quarter of calendar year 2014.