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Navistar's Kozek: Deal strengthens International, expands GM portfolio

Sept. 30, 2015
New model will replace International TerraStar in Navistar’s lineup, expand options for GM

The announcement of a joint development project between Navistar and General Motors will lead to a new Class 4-5 truck platform that will fill a gap in GM’s commercial vehicle lineup and serve as a replacement for Navistar’s International TerraStar model.

The agreement announced this morning calls for Navistar to build conventional cab trucks under the Chevrolet and International banners.  Production will start in 2018 at Navistar’s Springfield, OH, plant. The OEM said it will invest $12 million in the plant and add 300 jobs.

“It is a Class 4-5 lineup,” Bill Kozek, president, Truck and Parts, for Navistar, said during an afternoon conference call. “From our standpoint, it will probably be more Class 5; it could be stake beds, box trucks, vehicles for tree service. It will primarily be in the construction-type segment. On the Chevy side, it’s probably more Class 4 pickup models.”

GM previously offered medium-duty truck models, including the GMC TopKick, closing the business in 2009 when it failed to find a buyer for the group.

The trucks will be jointly developed and feature both gasoline and diesel power, according to Kozek and a press statement issued this morning.

“It’s an opportunity for both of us to participate in an area that neither of us have been [heavily] involved in [the last few years],” Kozek said. “It allows GM to expand, primarily, its Chevrolet brand, and it allows Navistar to strengthen its International truck lineup.”

The vehicles will use “many GM components and engines” and, from a Navistar perspective, allow it to continue its “customer-centric approach” to “provide our customers with the best products available,” Kozek said.

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“Bringing medium-duty conventional cab trucks back into the portfolio strengthens [our] commitment to providing commercial customers with more choices and one-stop shopping for a versatile lineup of trucks, vans and crossovers,” Ed Peper, U.S. vice president for GM Fleet and Commercial Sales, said in a statement.

Navistar said the new truck, to debut in 2018, will replace the International TerraStar in the Class 4-5 market.

In 2009, General Motors shuttered its medium-duty truck business, which featured the Chevy Kodiak and GMC TopKick models, after trying unsuccessfully to find a buyer for the business. Navistar was a rumored suitor for the business, but no deal could be reached.

GM and Navistar renewed conversations a few years ago on the possibility of joint Class 6-7 vehicles, Kozek said, but again, an agreement could not be reached.

The time may be right, though, for GM to expand its portfolio back into the Class 4-5 market. Jonathan Starks, director of analysis for FTR, told a gathering of industry leaders at the firm’s recent annual meeting that the medium-duty segment should reach 199,500 units in 2016 and grow to 203,400 units by 2018. Much of that growth is going to occur in the Class 4-5 segment, Starks emphasized, with sales growing from 52,900 units this year to 58,200 in 2016, some 63,700 units by 2017 and 66,900 units by 2018.

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According to experts, about 80% of the Class 5 market is diesel powered, but in Class 4, gasoline dominates.

GM has been revamping its commercial lineup for the last several years, first bringing back the Colorado pickup, adding the Chevrolet City Express commercial van (based on Nissan’s NV200 van), and then, earlier this year, announcing an alliance with Japan’s Isuzu Motors. That agreement calls for Isuzu to build low-cab-forward (LCF) medium-duty trucks for GM, starting in 2016. The six models – Chevrolet 3500, 3500HD, 4500, 4500HD, 5500 and 5500 HD – are based on the Isuzu N-Series, which GM will procure from Isuzu and distribute through Chevrolet dealers.

“Bringing low-cab-forward trucks back to our portfolio strengthens Chevrolet’s commitment to providing commercial customers with more choices and provides customers with a versatile lineup of trucks, vans and crossovers,” Peper said at the time. “This addition helps our dealers satisfy their commercial customers’ needs all in one place.”

The LCF trucks will be offered in regular-cab and crew-cab body styles. The trucks will be offered with either a General Motors’ sourced 6.0L V8 gas engine and six-speed automatic transmission, Isuzu-sourced 3.0L or 5.2L turbo-diesel engine, depending on the model. The gas-powered models will be assembled in the U.S. in Charlotte, MI.

Chevrolet’s fleet and commercial choices include the full-size Silverado lineup, the Silverado 2500HD and 3500HD full-size chassis cab models and the midsize Colorado, the City Express small van and Express range of full-size vans.

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