Navistar sells stake in joint venture with Mahindra in India
December 18, 2012
LISLE, Ill. -- Navistar has announced it is selling its stake in a joint venture with Indian truck maker Mahindra & Mahindra. Mahindra plans to purchase Navistar’s share of the venture for US$33 million.
LISLE, Ill. — Navistar has announced it is selling its stake in a joint venture with Indian truck maker Mahindra & Mahindra. Mahindra plans to purchase Navistar’s share of the venture for US$33 million.
The deal covers both truck and engine joint ventures. The sale, which requires regulatory approval in India, will be completed in early 2013, the companies announced. Navistar’s exit from its joint venture with Mahindra is part of the company’s ‘Drive to Deliver’ turnaround plan, launched in August.
The company has been analyzing all of its businesses and programs to determine their return on invested capital and is identifying areas for improvement. “Since it was established in 2005, Mahindra Navistar Automotives has created a niche for itself in the Indian CV industry,” said Dr. Pawan Goenka, president, Automotive and Farm Equipment Sectors, Mahindra & Mahindra. “MNAL has set up a world class dealer and service network for trucks, which coupled with synergies with Mahindra’s dealer network gives us a significant opportunity to grow our presence in the truck market. In addition, the product has been well accepted as is evident from our high-ranking in the TNS customer satisfaction survey. M&M is committed to the success of the truck business. We acknowledge the contribution made by Navistar to this venture thus far and appreciate their support for business continuity after they exit the business.”
“While the Indian market has not expanded as we had originally expected and industry challenges there continue in the near term, we still see promise in India going forward. But given Navistar’s 2013 priorities, our capital and focus needs to be allocated to other business opportunities in the near term,” said Troy Clarke, president and chief operating officer, Navistar. “Mahindra has extensive experience and knowledge of the Indian automotive sector and they are best situated to devote the time and resources required to capitalize on future opportunities in India.”
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