Just months after forming a global truck venture with Caterpillar, Navistar has acknowledged it is engaged in conversations with Anhui Jianghuai Automobile Co. (JAC) to possibly form a joint engine venture for the Chinese market.
The venture, if formed, would be a 50-50 partnership to supply diesel engines for vehicles in China as well as possible export markets, Navistar said in a release. The deal would also include a research and design center in China’s Anhui province for engineering, product design and technological advancements.
“This proposed joint venture would bring together the resources of two leaders, JAC in China’s commercial vehicle segment and Navistar in the global diesel engine business,” said Eric Tech, president, Navistar Engine Group. “The result would yield outstanding advanced technology products for commercial truck owners throughout the region.”
Additional details need to be worked out, as well as approval by each company’s board of directors, before the venture can become final. The management plan calls for eight directors to run the company, with JAC and Navistar supplying four apiece.
“This key initiative would not only give JAC access to world-class engine products, technology and management but would also support our long-term business growth strategy,” said Zuo Yanan, chairman of JAC.
JAC sells Refine light and heavy-duty trucks, sports recreation vehicles under the name Rein, carriage chassis, and cars.
Navistar and Caterpillar finalized talks in September to form NC2 Global. That company, headed by veteran Navistar executive Al Saltiel, will develop, manufacture and distribute commercial trucks globally, focusing initial efforts on Australia, Brazil, China, Russia, South Africa and Turkey. The product line will include conventional and cab-over trucks and will be sold under both the CAT and International brands, Navistar said.
A Frost & Sullivan report issued this Fall predicts the Chinese truck market, which jumped 67% in the second quarter of this year, will climb from 1.92 million units sold in 2008 to over 2.68 million units sold by 2015.