MUNICH, Germany – Volkswagen is showing interest in acquiring a majority of Navistar “at some point,” building on a minority stake that has already been secured.
Volkswagen Truck and Bus acquired 16.6% of Navistar in 2016, and has already committed to developing a joint big bore powertrain for the North American market, as well as a medium-duty electric powertrain. Now Volkswagen’s commercial arm is also preparing for a potential stock listing as it looks to take on other global manufacturers including Daimler and Volvo.
The comment about expanding the interest in Navistar was made to reporters by Matthias Gruendler, the financial chief of Volkswagen Truck and Bus.
“Our alliance with Volkswagen Truck and Bus, which recently celebrated its first anniversary, is already demonstrating strong progress. We look forward to continued success with our strategic alliance,” said Navistar spokeswoman Lyndi McMillan, when asked to comment.
For its part, Volkswagen Truck and Bus is already said to be cutting costs across MAN, Scania, and Brazilian VW truck operations through joint procurement and parts development. MAN’s Diesel and Turbo is being shifted to the parent company.
In a briefing during the North American Commercial Vehicle Show, Volkswagen Truck and Bus chief executive officer Andreas Renschler noted that Navistar procurement teams had already begun to leverage their Volkswagen relationship, too, reaching out to 250 new and existing suppliers and identifying 150 contracts and improvement opportunities.
The two companies were even working together before any equity changed hands. Navistar unveiled the A26 engine that shares many components with MAN’s D26, including the crankcase and rotating components.
The companies are also looking to combine telematics capabilities found in Navistar’s OnCommand and Volkswagen’s Rio.
A majority stake in Navistar could be handled without using the funds from an initial public offering (IPO), Gruendler has been reported as saying, suggesting the price tag would be between 3 and 4 billion. But he didn’t say whether he was referring to Euros or US dollars.
Last week, Volkswagen also established a cooperation agreement with Hino, which will involve research and development into such things as hybrids, connectivity, and semi-autonomous technologies.
Navistar itself returned to profitability in 2017, reporting net income of $30 million compared to a net loss of $97 million in its 2016 fiscal year. The truck segment recorded a loss of $6 million, which was a dramatic shift from a loss of $189 million in the 2016 fiscal year.
an earlier version of this article was updated to include comments from Navistar and correct a 2016 figure for Navistar’s financial standing.