Volkswagen has said that it is open to buying a majority stake in U.S. truckmaker Navistar “at some point”, as the German automaker prepares its truck business for a possible stock market listing that could help raise funds to expand.

Volkswagen Truck & Bus acquired a 16.9 per cent stake in Navistar International Corp in 2016 and last week joined forces with Toyota’s truck brand Hino as it strives to compete more effectively with global truck market leaders Daimler and Volvo.

Volkswagen plans to convert its truck division, which owns Scania and MAN and VWs Brazil-based commercial vehicles business, into a public limited company as a prelude to a potential stock market listing.

“Taking over Navistar would make sense at some point,” Matthias Gruendler, the finance chief of VW truck and bus, told reporters on Monday.

“A takeover would require between three and four billion in extra costs and could be shouldered without proceeds from a possible initial public offering,”  he said, without specifying whether he was talking euros or dollars.

“The cooperation with Navistar is working really well,” he added.

“U.S. law would require VW to issue a formal takeover bid for Navistar if the German manufacturer raises its stake in the U.S. company above 17 per cent,” Gruendler said.

VW paid $US256 million for its stake in Navistar, bolstering Europe’s biggest automaker’s access to the lucrative North American truck market.

“We  have identified significant synergies from joint procurement with Navistar last year,” VW Truck & Bus CEO Andreas Renschler said.

“Foreign expansion as well as more joint development and purchasing of parts between MAN and Scania may help our truck and bus operations increase their operating margin to nine per cent by about 2025 from 6.9 per cent last year,” Renschler added.

VW group’s supervisory board paved the way last Thursday for a potential IPO of its truck business as part of a sweeping shake-up that also included naming a new group CEO and plans to streamline its multiple car brands.

Renschler said preparations to tap capital markets either through an IPO or selling debt would take 12 months, adding MAN’s Diesel and Turbo engine unit and transmissions maker Renk would be switched to VW.

“We need a lot of investment and funding,” Renschler said. “We are lifting the truck group to the next level.”