affiliate of Navistar International Corp. and Anhui Jianghuai
Automobile Co. Ltd. (JAC) have signed a joint venture agreement to
develop, build and market advanced diesel commercial engines in China.
In addition, an affiliate of NC2, a joint venture between Navistar and
Caterpillar Inc., have also signed a joint venture agreement with JAC
to develop, build and market advanced commercial vehicles in China. JAC
is a leading China-based maker of commercial and consumer vehicles and
Through engine JV, Navistar and JAC will establish a research and
design center in China’s Anhui Province for application engineering
development, product design and technology advancements. A dedicated
manufacturing facility will be constructed in Hefei, Anhui Province of
China to produce JAC and the Navistar-designed MaxxForce brand diesel
engines. The truck joint venture will build vehicles at an existing
800,000-square-foot JAC manufacturing facility dedicated to medium and
heavy duty trucks.
According to Navistar, the joint venture will focus on meeting emerging
needs of the Chinese commercial truck market with Euro IV and Euro V
compliant technology, and the MaxxForce line of engines will provide
JAC customers with durable and fuel efficient clean air technology.
JAC’s 2010 vehicle sale estimates in the combined commercial vehicle
segments of light heavy trucks are 200,000 units. Diesel engines
produced by the new venture will be used in China.
The truck and engine agreements are integrated to support the advanced
technology power requirements of a number of medium and heavy duty
vehicles, which include the JAC Sword and Gallop brands and
International Brand TranStar, positioning JAC products in China to meet
the ever increasing demands of the Chinese market. Engines supporting
the full range of commercial trucks include the JAC existing products
and a wide range of Navistar MaxxForce brand engines.
Daniel Ustian, chairman, president and chief executive officer of
Navistar, said, “These joint ventures represent a significant step in
Navistar’s global growth. This is consistent with our strategic
platform of leveraging the technical capabilities and assets of great
companies. Navistar recognizes the importance of the Chinese market and
this venture with a strong partner such as JAC enables us to establish
a firm foothold in China as we grow our business in the Asia Pacific
Zuo Yan An, chairman, JAC, said, “Partnership with Navistar will bring
cutting-edge diesel and commercial truck technology providing products
with great fuel economy and durability and will enable JAC to continue
leading in the commercial vehicle market in China and to grow
Formation of the joint ventures is subject to finalization of certain
procedural steps and the finalization of certain ancillary commercial
agreements among the parties.