Navistar Taking Over Venture from Caterpillar

Sept. 30, 2011
Partners will distribute on-highway, vocational trucks via dealers outside U.S.

A joint venture of Caterpillar Inc. and Navistar International Corp. will become a Navistar subsidiary, and the partners will establish a new licensing agreement by which Navistar’s International brand and Caterpillar branded trucks will be distributed through each other’s dealers outside the U.S.

The partners will continue to manufacture heavy-duty vocational trucks for North American customers, and they agreed to develop a new, cab-over-engine Cat vocational truck for the global market.

"This new relationship streamlines the organization and will help us move faster and more efficiently," stated Phil Christma, president of the joint venture, NC(2). "Customers and dealers in the global markets where NC(2) has established distribution will build on their early successes with no interruption, and with the added benefit of getting products sooner."

Financial terms of the new arrangement were not announced.

Caterpillar produces heavy equipment and engines for commercial vehicles; Navistar manufactures diesel engines and commercial trucks. They have had numerous joint projects over many decades, and in 2008 they formed NC(2), with a focus the on-highway truck market. It was followed by a 50-50 venture, NC(2) Global LLC, that develops on-highway trucks for overseas markets, especially Australia, South Africa, and Brazil. Caterpillar and Navistar also produce Cat heavy-duty trucks for North America.

In addition to their truck business, Caterpillar handles remanufacturing for Navistar, and it supplies engine parts for some Navistar engines. Navistar supplies Caterpillar with power generation and marine engines.

"This next phase will move the relationship to a structure and business model that will be similar to the business relationship we have with Navistar for our North American vocational trucks," explained George Taylor, director of Caterpillar's Global On-Highway Truck Group. "As we have looked at the success of the Cat vocational truck launch in North America, we believe that a similar business model for commercial trucks for the rest of the world makes the most sense for our customers.”

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