Does VW Want to Build Big Trucks?

Vw-pickup-truck II
What kind of Class 3, 4, and 5 trucks would Volkswagen make if they had a strong foothold in the U.S. heavy- or medium-duty truck market? We might get to find out if some of the rumors we're hearing are even partially true.

Automotive News reported that Volkswagen AG is looking for a U.S. heavy-duty equipment and engine maker to make stronger inroads into the U.S. market to compete better with prime rival Daimler AG (which owns Freightliner).

In fact, a German financial newspaper reported over the weekend that Volkswagen could be interested in purchasing Navistar International to compete better with Volvo, Mack and Freightliner in the profitable U.S. market. To date, VW owns Swedish heavy-duty truck maker Scania and MAN SE, but neither one has a substantial presence in this market.

The Navistar connection at this point is just speculation. VW has not made any announcements about its intentions, but it doesn't hurt that Navistar stock took a big hit this week as a court ruling went against the heavy-truck and engine builder, determining the company will not be able to continue paying fines to the EPA for not complying with the stricter 2010 federal emissions regulations.

VW Navistar II
The lawsuit was brought on behalf of Navistar's competitors, which said they had to spend hundreds of millions of dollars in technology and research to meet the stricter 2010 diesel engine requirements. The EPA gave Navistar a special exception, penalizing the company as much as $2,000 per engine sold that does not meet the emissions regulation. Navistar has said it paid as much as $10 million in the first quarter of this year. The company said it disagrees with the current ruling and will most likely appeal.

As a result of the ruling and a rough first quarter of sales, Navistar stock has fluctuated quite a bit, possibly making the company an even more attractive "partner" for a company like VW. Regardless of what happens, the fact that VW is looking for more heavy-truck influence in the U.S. market could produce some interesting options for medium-duty truck buyers in the future.

What happens to Navistar will be interesting to watch, as activist investor Carl Icahn recently upped his stake in both Navistar and Oshkosh in the past year. In fact, some reports speculated that he wanted Navistar and Oshkosh to merge in order to be a stronger company, more resistant to this type of purchase. So far, he has not been able to influence either side.

VW PIckup concept 2008 II

Comments

@imoore. Common mistake ,UD Trucks is part of Volvo. Nissan does not have a large truck section. The "Nissan" in Nissan UD is a common Japanese word.
VW will gradually takeover parts of Navistar( they are in dire straits and need the cash), They VW want to get into the over the road US truck market and Navistar is a golden opportunity to do so.
Navistar ALREADY is the recipient of VW(MAN) Truck engine technology.
CAT Like PACCAR are a bit too big to swallow. CAT especially.



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