Truckin' USA: Volkswagen buys up stake in Navistar
The automaker will begin supplying engines to Navistar in an attempt to establish a base in the US heavy-truck segment.
It's nice to write about Volkswagen from a good news angle, for once.
Volkswagen has a pretty stout foothold in the truck market outside the US, thanks to the strengths of its MAN and Scania brands. Yet, it never really made headway in the US heavy-truck market, but it's looking to change that with a new partnership with Navistar.
The German automaker will supply engines to Navistar International Corporation, formerly known as International Harvester Company, Reuters reports. In exchange for those engines, Volkswagen will receive a 16.6 percent stake in the company. At VW's purchase rate of $15.76 a share, the deal will be worth about $256 million.
Navistar has been on the hunt for a partner ahead of new US trucking regulations that seek to reduce emissions by up to 25 percent by 2027. It's a bit of a match made in heaven -- Navistar needs a partner with lots of truck experience, and VW wants to enter a new market in the US.
"We are very pleased to partner with a global leader who shares our view of the world, in an alliance that will deliver multiple benefits and is consistent with our open-integration strategy," said Troy Clarke, president and CEO of Navistar, in a statement. "Starting in the near term, this alliance will benefit our purchasing operations through global scope and scale."
Of course, there's a bit of hilarity behind all this, because Volkswagen's passenger-car diesel engines have been the source of much consternation for the automaker. VW is still working to settle court cases around the world after it admitted to willfully skirting emissions regulations with software meant to cheat lab tests. The automaker's on the hook for billions of dollars worth of settlements, including buybacks and fixes.