Caterpillar Inc. and Navistar International Corp. have revealed more details of their rapidly evolving alliance, announcing yesterday that they will jointly build and market trucks in global markets before the end of the year as well as create a full lineup of vocational trucks to be sold by Caterpillar dealers in North America.
Last summer, the two said they would create a Caterpillar-branded vocational truck, which many assumed would be limited to severe-service applications, and just last month Navistar unveiled a 15-liter diesel for post-2010 sales that combines the Cat C15 block and Navistar fuel system. Yesterday's announcement expands on those plans, indicating how the two companies intend to use the new alliance to address the individual marketing needs of each.
With Caterpillar's decision to exit the U.S. and Canadian on-highway engine business in 2010 when the next round of diesel emissions requirements go into effect, its dealers needed a way to replace engine-service business lost by that move. By turning to Navistar's production capacities for an entire lineup of vocational trucks, Caterpillar satisfies that requirement, and then some.
Caterpillar Inc. and Navistar International Corp. have revealed more details of their rapidly evolving alliance, announcing yesterday that they will jointly build and market trucks in global markets before the end of the year as well as create a full lineup of vocational trucks to be sold by Caterpillar dealers in North America.
Last summer, the two said they would create a Caterpillar-branded vocational truck, which many assumed would be limited to severe-service applications, and just last month Navistar unveiled a 15-liter diesel for post-2010 sales that combines the Cat C15 block and Navistar fuel system. Yesterday's announcement expands on those plans, indicating how the two companies intend to use the new alliance to address the individual marketing needs of each.
With Caterpillar's decision to exit the U.S. and Canadian on-highway engine business in 2010 when the next round of diesel emissions requirements go into effect, its dealers needed a way to replace engine-service business lost by that move. By turning to Navistar's production capacities for an entire lineup of vocational trucks, Caterpillar satisfies that requirement, and then some.
Yesterday's announcement made it clear that plans go well beyond a severe-duty Cat truck to include a full line of vehicles that combine Navistar's International brand chassis and MaxxForce engines with proprietary Caterpillar components. Those components could include Cat's heavy-duty automatic transmissions, cooling system designs, and even the hydraulics used in its earthmoving and construction equipment, according to a Caterpillar spokesperson.
"We will offer a full lineup of vocational trucks powered by Cat-branded 11-, 13- and 15-liter engines," Charissa Ebbert told Fleet Owner. "Caterpillar's core business is construction, and these trucks will help dealers offer a full product line that includes the machines as well as the trucks that work with those machines."
In addition to the recently announced Caterpillar-based 15-liter diesel, Navistar currently offers 11- and 13-liter diesels jointly developed with MAN of Germany. All three are being developed to meet 2010 emissions standards and presumably will power the new Cat vocational vehicles as well as International trucks. The Cat-branded trucks will be built at Navistar's Garland, TX, plant, which currently produces International severe-service vehicles.
It remains to be seen whether Cat's experience with heavy-duty hydraulics will lead the two partners into development of full truck and body combinations such as refuse packers and dump trucks. The first models are scheduled to be introduced in late 2010 and go into full production in 2011, according to the press release.
The new global project also announced yesterday is a 50/50 joint venture that will "develop, manufacture and distribute commercial trucks in regions outside of North America and India," according to a press release issued yesterday. The markets specifically identified were Australia, Brazil, China, Russia, South Africa and Turkey. The release said products would include both conventional and COE designs sold under Caterpillar and International brands, with initial availability "as early as the third quarter of 2009."
The two partners "are still working through details" and not ready to announce production locations for the global products, according to Ebbert. The trucks and their engines will be branded either Caterpillar or International "depending on our market strategy for each region," she said.
Although Navistar has a strong market position in the North American medium- and heavy-duty truck markets, its only significant global presence is a joint venture with Mahindra & Mahindra of India, and a wholly owned subsidiary building engines for the Brazilian market. The new JV will take advantage of Caterpillar's established international dealer network for construction equipment to help Navistar move into the ranks of international truck builders such as Daimler and Volvo.
