Navistar boss Troy Clarke has told journalists in Hannover that his company is is already reaping big benefits from. the equity stake Traton Group ( formerly VW Truck and Bus) largely thanks to the extra purchasing power that has come as a result of the German owned vehicle acquiring a 17 per cent stake in the US company.
Navistar president CEO Troy Clarke said the related joint venture for procurement offered the business access to a bigger scale and there have also been opportunities to licence technology and to participate in related research and development.
A Traton-developed powertrain is in the works for use in Navistar trucks, and is expected by 2021.
“We were the first alliance partner of what is now Traton, and that was a multi-year journey,” said Clarke.
“At the end of the day, Andreas Renschler and the leadership at Traton said this is a company that has more good days ahead of it than bad days ahead of it,” Clarke added.
Navistar’s fortunes have turned around and the long beleaguered company is now enjoying black ink on its ledger despite some some challenges.
“The business has improved its EBITDA six years in a row, and is now making net income rather than recording losses, it’s really been, financially, on a good path,” said Navistar executive vice-president and chief financial officer Walter Borst.
Through shared procurement the companies expect to save $AUD694 ($US500 million) over five years, and realise a $AUD 277 million ($US200 million) run rate by the fifth year.
“We’re on track to do this,” he said.
A Traton joint venture with Hino is also looking to secure savings in a similar way.
Traton has demonstrated further faith in Navistar by increasing its stake over the original 16.6 per cent, buying shares on the open market and at rates higher than those paid when securing the first shares, Borst added. The deal involving the original equity stake closed in March 2017.
Navistar has also hinted at a new product to be launched in early November.