Navistar International Corporation
) and China-based truck maker Anhui Jianghuai Automobile Co. Ltd.
("JAC") are happy, as they have received the green light from
China's National Development and Reform Commission (NDRC) to move
ahead with their commercial engine joint venture after waiting for
nearly two long years.
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In September 2010, Navistar entered the joint-venture agreement
with JAC to develop, build and market advanced diesel commercial
engines in China. Since then, the two companies have been preparing
for a smooth launch.
Navistar has established a central office in Shanghai as well as
satellite offices in Beijing and Hefei in order to develop insight
and understanding of the Chinese market. The company has also
started construction on a machining and assembly facility, research
and development center, and administrative offices in Hefei to
support the new venture.
The joint venture will cater to the Chinese commercial truck market
and will help JAC gain access to Navistar's Euro IV and Euro V
compliant technology. The products slated to be launched under the
joint venture include Navistar's MaxxForce 3.2, 4.8, 7.2 and JAC's
2.8 4DA1 liter engines.
The joint venture also aims to develop light-, medium- and
heavy-duty commercial trucks. The partners plan to submit their
plan for commercial truck joint venture to the government for
formal approval later this fall.
Navistar, a Zacks #5 Rank (Strong Sell) stock, reported a loss of
$137 million or $1.99 per share (excluding special items) in the
second quarter of 2012 ended April 30, 2012, in sharp contrast to a
profit of $102 million or $1.30 per share in the corresponding
quarter of last year and the Zacks Consensus Estimate of a profit
of 67 cents per share.
Revenues declined 2.9% to $3.3 billion, missing the Zacks Consensus
Estimate of $3.6 billion. The decline in revenues was attributable
to a decrease in sales in the engine and part segments, which were
partially offset by strong sales in the truck segment.
Navistar International Corporation is based in Warrenville,
Illinois. It manufactures and sells commercial trucks, mid-range
diesel engines, buses, military vehicles and chassis for motor
homes and step-vans. It also provides service parts for various
trucks and trailer. The company is one of the largest truck