Mumbai: Commercial vehicle maker Mahindra and Mahindra said on 2 November it has entered into a joint venture with US-based Navistar International Corp to manufacture diesel engines in India at an investment of $90 million (Rs355 crore) over the next five years.
Navistar International Corporation through its subsidiary, International Truck and Engine Corporation, signed an agreement to tis effect with the company to manufacture engines for medium and heavy commercial trucks and buses in India, M&M said in a communique to the Bombay Stock Exchange (BSE).
The joint venture, to be named Mahindra International Engines Ltd (MIEL), would be owned 51% by the Mahindras and 49% by Navistar, the company added.
“Our plant in India will produce world-class engine models for both the Indian and global export markets. The JV will not only extend our existing partnership with Navistar but the resulting synergies will also see MIEL emerge as a force to reckon with in the global OEM market,” Mahindra Group vice chairman and managing director, Anand Mahindra, said.
M&M president, automotive sector, Pawan Goenka said the JV marks the second significant partnership between M&M and the Navistar affiliate, following one in 2005.
The new company’s technologically advanced diesel engines will power full line of trucks and buses produced by the preceding JV by 2009, he added.
M&M’s sourcing expertise would help the JV source up to 85% of engine components locally, Goenka said.
Navistar is North America’s largest combined commercial truck, school bus and mid-range diesel engine producer.