Volkswagen Announces $256 Million Investment in Navistar
Deal Gives VW Long-Sought Foothold in U.S. Market, Helps Navistar with Emissions
The TDI emission scandal may have temporarily slowed Volkswagen’s growth and global ambitions. However, behind the scenes and during the midst of the public scandal, VW was in discussions with U.S.-based commercial and heavy-truck–maker Navistar about a partnership to help the company, ironically enough, with future emissions compliance. VW is taking a 16.6 percent stake in the company, valued at approximately $256 million. The deal will give Navistar access to VW’s heavy truck technology portfolio, which includes brands MAN and Scania in Europe.
Many believe this latest step is part of VW’s long-term plan of completely spinning off its Truck & Bus unit to raise capital to pay for the ongoing TDI emissions scandal in the U.S. and globally. The alliance is estimated to help Navistar realize cost-saving synergies of at least $500 million within the first five years through procurement and technology collaboration. Navistar has been actively seeking a partner since 2010 when the EPA denied approval on its exhaust-gas-recirculation strategy to control NOx emissions, in the hopes of avoiding SCR aftertreatment. Just last month, the EPA and DOT jointly announced tougher greenhouse gas standards on Class-7 and Class-8 trucks. Navistar has been offering MAN-engineered diesel engines in its trucks since 2005.