Navistar Reports on VW Alliance

Tom Berg, Truck Editor | September 27, 2017
International HX will be available wit a sleeper cab

Troy Clarke, chairman, president and CEO of Navistar, and Andreas Renschler, head of VW’s commercial vehicle arms, reported this week that their alliance is proceeding faster than they had expected. “People” is the reason Renschler gave in describing the smooth cooperation between Germans and Americans forming teams that are pursuing new products and greater efficiencies.

“They’re getting along very well,” Clarke said of the team members. “We signed the agreement at the Lisle (Ill.) headquarters on March 1, and early that afternoon the procurement joint venture was officially formed, the team met and began working. We estimate that procurement of parts on a world-wide scale will save us $200 million a year.”

Savings achieved since March helped Navistar report a profit of $37 million in its fiscal third quarter, following a long series of quarterly losses. “We did other things, too, that led to that,” Clarke said. And most helpful was the revival in sales of medium and heavy trucks since a slump last year. 

The two executives said Navistar and VW are collaborating on:

  • An integrated diesel powertrain that will include a 15-liter diesel and might involve an automated transmission, due out in 2021;
  • An electric powertrain which will help Navistar offer a battery-electric Class 6-7 urban truck in late 2019 or early ’20; and
  • Connected vehicle activities that will “converge” separate programs in which Navistar now has 350,000 vehicles running in North America and VW’s MAN and Scania arms have 650,000 operating in Europe.

Connected vehicle capabilities include remote diagnostics, over-the-air upgrades of operating software, and recommended parts replacement based on experiences of other fleets using similar vehicles under similar conditions, said Terry Kline, Navistar’s vice president in charge of these services.

Development of the alliance’s 15-liter diesel won’t necessarily banish Cummins’ X15, which is currently standard in the retro-styled and recently redesigned LoneStar and is offered in other International models, including the HX.

“They are a proven supplier,” said Renschler. “We deal with them in Europe.”

“Cummins is a great partner and Cummins has a great following here,” Clarke said.

Though the two companies are working closely together, there are no plans for a merger, the two executives said.