Volkswagen wants to catch up with Daimler and so it is now thinking about a plan to take a stake in Navistar International, the U.S. truck and engine maker, according to a report last Sunday by the Financial Times Deutschland. The article, which declined to name its sources, said that VW would be better able to compete with Daimler Trucks by teaming up with Navistar in the U.S. Daimler Trucks, the biggest commercial vehicle maker in the world, is the owner of the U.S. truck brand Freightliner. Volkswagen has yet to comment on this report. Last Thursday, Navistar reported a loss in the second quarter.
It cited a huge charge for warranty costs, involving engines made in 2010 and 2011, lowering its shares by as much as 28%, their lowest rate since late 2008. Volkswagen oversees Swedish truckmaker Scania, which is not a major presence in the U.S., as well as Germany's MAN SE, which operates mostly in Europe, Brazil, and other growing market economies. There is a major split in the U.S. heavy truck market between Daimler's Freightliner, Volvo with its Mack brand, Navistar's International, and Paccar's Kenworth and Peterbilt trucks. Since European trucks are made with the cab over engine, synergies have become more difficult to accomplish with a U.S. truckmaker.
However, VW would at least gain control over a sales and distribution network aside from the International brand, according to Reuters’ source. However, if Volkswagen aims to take a stake, it would have to transact with activist investor Carl Icahn, who had been vocal about a merge with U.S. heavy truckmaker Oshkosh Corp. in late 2011 and early 2012. Last Friday, Navistar shares gained almost a fifth in value, after Icahn increased his stake in the company to almost 12%. Sergio Marchionne, the CEO of Fiat and Chrysler, said last Friday that he was interested in the U.S. truck market.
