Navistar and Caterpillar Join on Global Truck Business

The two major manufacturers sign a Memorandum of Understanding to cooperate in serving an expanding base of engine truck and equipment customers worldwide.

The companies will work together to develop, manufacture and distribute commercial trucks in what they define as “select regions outside of North America.” Beside current market coverage in the US and Canada, Navistar has distribution in Mexico and the rest of Latin America.

Caterpillar sells its on-highway truck engines in Mexico and Latin America. It also has distribution networks in Australia and New Zealand, the UK, Belgium, Russia, China and South Africa.

About the cooperative effort, Dee Kapur, president, Navistar Truck Group, observes, “The combination of Navistar’s truck design, development and manufacturing expertise and Caterpillar’s unparalleled worldwide distribution creates a significant advantage for global customers through the ability to offer the right vehicle for the right application through more than 4,700 points of distribution around the world. The North American Caterpillar distribution system provides expanded reach for severe service trucks with big bore power, a segment where Navistar has traditionally not been as focused.” The product offering would include a full line of medium and heavy-duty trucks in both conventional and cab over designs.

Caterpillar has determined not to supply engines that meet the more stringent US Environmental Protection Agency 2010 regulations for truck and other on-highway original equipment manufacturers (OEMs). The company does assure customers that its dealers will continue to provide product support and service beyond 2010 for all Caterpillar on-highway engines regardless of truck brand.

Caterpillar and Navistar plan to cooperate on engine development, incorporating “best in class” technologies from both companies. “There are many opportunities for technology sharing and development that would result in the ability to better meet the worldwide demand for diesel engines in both on and off-highway applications,” notes Jack Allen, president, Navistar Engine Group.

In explaining the strategic move, Douglas R. Oberhelman, Caterpillar Group President, claims, “In the past 15 years, Cat has become significantly less dependent on the sale of on-highway truck engines in the total contribution of our global engine profitability. Our global power systems business has grown significantly—in fact we supply approximately 400,000 diesel engines annually outside of the on-highway truck market. We intend to remain the world leader in clean diesel engines, and this collaboration is a key enabler.”

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