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VW Considers Buying a Stake in Navistar

Volkswagen AG is pondering the idea of buying equity in U.S. commercial truckmaker Navistar International Corp., according to the Financial Times Deutschland, which cites no sources.
#Freightliner #Scania #Navistar

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Volkswagen AG is pondering the idea of buying equity in U.S. commercial truckmaker Navistar International Corp., according to the Financial Times Deutschland, which cites no sources.

The German newspaper points out that ties with Navistar would help VW better compete in the American market with rival Daimler AG, which owns Portland, Ore.-based Freightliner. An industry analyst tells Reuters that a Navistar stake would give VW access to the truckmaker's American distribution network but probably produce little immediate product synergy.

VW has a strong presence in commercial trucking markets in Europe and elsewhere through its own truck unit and its controlling ownership stakes in truckmakers Scania in Sweden and MAN in Germany. But VW lacks clout in the North American market, which is dominated by Freightliner, Navistar, PACCAR (Kenworth and Peterbilt) and Volvo (Mack).

Navistar has been struggling with weak sales, difficulty in meeting emission standards for its new diesel engine, recalls and steep warranty costs. The company posted an unexpected $172 million quarterly net loss last week and lowered its forecast for the fiscal year ending Oct. 31.

Navistar's share price rebounded 18% on Friday after billionaire investor Carl Icahn disclosed he had hiked his holding in the company to nearly 12% from 10%. Icahn urged Navistar earlier this year to merge with U.S. truckmaker Oshkosh Truck Corp., in which he holds about a 10% stake. Oshkosh opposes a Navistar tie-up.

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