GM, Navistar to Develop, Assemble Medium-duty Commercial Trucks

Under the deal, GM GM, +2.14% will supply components and engines to Navistar NAV, -1.27% which will build the trucks at its Springfield, Ohio, plant starting in 2018.

The agreement will allow Navistar to strengthen its product lineup and GM to expand its Chevrolet commercial truck portfolio, according to information from Navistar.

A long-term partnership reached by truck makers Navistar and General Motors will result in the development of a new line of Classes 4/5 commercial trucks.

Production is scheduled to begin in 2018, and most of Navistar’s $12 million investment will go toward upgrades at the Springfield plant and new equipment to produce the new vehicles. The trucks will be branded as Chevrolet and worldwide vehicles.

The current worldwide TerraStar will be replaced by the new products developed with GM.

Navistar, in a statement, said the deal will help it enhance its medium-duty portfolio and use its scale. He did say, however, that the partnership should benefit both manufacturers. The company’s strengths can be seen in multiple areas, such as its compelling growth in net income, good cash flow from operations, impressive record of earnings per share growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures.

“Our collaboration with GM is another example of our customer-centric, open integration approach – providing our customers with the best technologies available”, said Bill Kozek, president, Truck and Parts, Navistar.

“It has been a long time coming and there have been a lot of discussions”, Kozek said.

He also advised that while the two OEMs have “not had any discussions to date” on jointly developing trucks for other weight classes, that “certainly could happen” at a few point.