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It's Battle Of The Trucks, As Volkswagen Considers A Stake In Navistar

By Blake Z. Rong | June 11, 2012
Eastbound and down, via Germany: Volkswagen is looking to add a stake in American truck company, Navistar, better known for building International. International trucks are mostly recognizable as medium-duty trucks such as the DuraStar, for their legions of school buses, and their experiments in gaudy civilian behemoths. Problem is, Navistar's success has been waning: it lost $172 million in the second quarter, its lowest point since 2008, and the biggest hit to the company since Ashton Kutcher sold his CXT. A savior in the form of Volkswagen would be beneficial to Navistar to say the least, and would allow VW to make inroads on attacking the American truck market. Volkswagen and Navistar will have a big fight on their hands. Daimler Trucks just so happens to be the largest truckmaker in the world, and as any harried freeway lane-merger has seen in their rearview mirror, its Freightliner trucks are a familiar nameplate on American roads. Between the heavy truck market here, it's the Big Four: Freightliner; Volvo, which owns Mack; Navistar's International; and Paccar, which has Peterbilt and Kenworth (arguably the most American of the brands). But Volkswagen is no spring chicken when it comes to building trucks—it owns MAN, the manly German company, and Sweden's Scania, which used to own Saab. Both companies have no presence in North America, but owning an American truckmaker would give Volkswagen better leverage on a new distribution network. "European trucks are built with the cab over engine so synergies are indeed harder to achieve with a U.S. truckmaker, but VW would at least gain control over a sales and distribution network in addition to the International brand," said an anonymous insider. Already Volkswagen has increased its stake in MAN, and is looking to snatch Navistar from a potential merger with Oshkosh Trucks. This would raise the amount of properties that the Volkswagen Group has interests in to seventeen properties: ranging from MAN to Scania to Bugatti, Lamborghini and Audi, to FAW and Shanghai Volkswagen to Bentley and Italdesign and possibly the Cayman Island accounts of a few supervillains. Volkswagen even builds a few European-only commercial vehicles itself, and with this increasing stake in world domination and an American distribution arm, could we see some Volkswagen vans here, a la the formerly-badged Freightliner Sprinter? Source: Reuters
  • Navistar
 
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