As European auto heavyweights Volkswagen AG and Fiat Industrial SpA are reportedly planning to buy into the loss-making US truck maker Navistar International, its Indian partner, Mahindra & Mahindra (M&M), remains on the edge.Volkswagen, which has two heavy-duty truck brands, Scania and MAN, is eyeing an equity stake in Navistar to gain a stronger foothold in the US commercial vehicle market, according to international media reports.
Similarly, the Italy-based Fiat, which owns the commercial vehicle brand Iveco, has also reportedly expressed interest in Navistar, as such a move would allow it to command a better presence in the US market. A sell-out of Navistar may impact the business plans of India's utility vehicle market leader, M&M, which forayed into the heavy trucks segment after joining hands with Navistar in 2005.
Though M&M owns mini-trucks ranging from 0.5 tonne to 1.5 tonne under its own brand along with commercial passenger vehicles, the company sells larger products under the joint brand of Mahindra Navistar.
The Indo-US collaboration has been retailing 25-49-tonne trucks, including tippers, under the 51:49 joint venture company Mahindra Navistar Automotive Ltd (MNAL) since 2010. The two companies have worked on developing new products and engines for Indian conditions, with investments worth Rs 750 crore (Rs 7.5 billion) till date. A further Rs 250 crore (Rs 2.5 billion) is lined up for expansion purposes.
When asked if M&M had spoken to the management of Navistar, Pawan Goenka, president (automotive and far equipment sectors), M&M,