M&M-Navistar JV’s First Truck Launched


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Re: M&M-Navistar JV’s First Truck Launched

After rolling out the 5000th truck from its Chakan plant, Mahindra Navistar Automobiles Ltd (MNAL), the commercial vehicles (CV) joint venture between India's Mahindra Group and International Truck and Engine Corporation ( the operating company of Navistar), has embarked on an expansion drive.

The company plans to scale up production of LCV load and mini-buses at its Zaheerabad plant to 20,000 units per year as well as ramp up the Chakan plant to produce 50,000 trucks per annum within the next three years.
"We plan to take our bus production from 11,000 per annum now to 20,000 per year within three years time", Nalin Mehta, managing director, MNAL said here today adding that the company enjoys a leading position in 30-40 seater light commercial vehicle (LCV) bus segment in the country.

It makes buses that cater to the school segment and for corporates to ferry executives at its Zaheerabad plant near Hyderabad.

"We have a 12 per cent market share in the segment nationally", Mehta added. The scale up would not require any additional investment at the plant, he informed.

As for the heavy commercial vehicle (HCV) trucks segment, MNAL is in the process of investing Rs 300 crore at its Chakan plant near Pune to ramp up the production capacity to 50,000 trucks per annum within the next three years. "We have already invested around Rs 750 crore at the Chakan plant and have a sanction of Rs 1050 crore. The paint shop is already equipped to roll out 50,000 trucks per annum working in three shifts. The rest of the shops would to scaled up soon", Mehta told Business Standard adding that MNAL now makes 500 trucks per month (6000 trucks per annum) at the Chakan plant.

The HCV trucks segment has been clocking a 8-10 per cent growth per annum, barring the months of April and May this year, when the industry witnessed negative sales figures.

"We see the situation improving from September onwards. In the longrun, the industry will continue to clock a compounded annual growth rate (CAGR) of 8-10 per cent as the freight index is not showing any signs of dipping. MNAL targets to match the industry growth rate", Mehta said.

Meanwhile, upbeat from garnering a 3.4 per cent national market share in the trucking space in FY12, MNAL is now looking at tapping the exports market, starting with the SAARC (South Asian Association for Regional Cooperation) countries in the coming four-five months.
With a view to increase market penetration, MNAL has also lined up a slew of launches in FY13.

The company is looking to offer integrated solutions for the trucking industry and is coming up with MN 25 tonne RMC (Ready Mix Concrete) for the construction industry, MN 25 & 31 tonne bulker variant for the cement industry, MN31 tonne tipper for carriage of coal and also MN 25 & 31 tonne refrigerator vans for the food processing industry.

Mahindra Navistar has also started testing a couple of trucks that have been customised for the South African market. "We will start with a 16 tonner and then come up with a 25 tonner for the South African market. We also plan to enter the SAARC countries within the next four to five months. We do not need a new product for the SAARC market", Mehta informed.
 
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Re: M&M-Navistar JV’s First Truck Launched

Any plans to launch buses to compete against Tata Nuvo, Volvos & Mercs ?
 
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Re: M&M-Navistar JV’s First Truck Launched

Any plans to launch buses to compete against Tata Nuvo, Volvos & Mercs ?
When they had announced the JV they had also stated that they would be entering the Bus market, but till now no launches and the company is staying quiet about it, looking at the current Navistar's financial position i don't think it will happen soon.
 
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Re: M&M-Navistar JV’s First Truck Launched

Even as the US truck major Navistar Corporation is facing regulatory and takeover threats from investors and global carmakers like Volkswagen and Fiat, its Indian joint venture partner Mahindra & Mahindra says its Indian arm, Mahindra Navistar, is largely insulated from the US developments.

Pawan Goenka, president, automotive, Mahindra & Mahindra, told ET that the US repercussions are not going to affect Mahindra Navistar Automotive (MNAL) since it does not depend heavily on the US partner.

"As far as we know, no company is taking any strategic interest in Navistar right now. There are two investors who hold 14.9% in the company, and it had recently taken a poison pill," he said. A poison pill is a strategy used by corporations to discourage hostile takeovers. With a poison pill, the target company attempts to make its stock less attractive to the acquirer.

The plan reportedly gives stockholders an option to buy $280 worth of shares at $140. "MNAL is self-sufficient; it does not depend on Navistar, or for that matter, even on Mahindra for anything. It has its own products, own Intellectual Property Rights (IPR), own sourcing base, own dealers, own design. Hence, it does not depend on any of the two corporates," added Goenka.

Over the past six months, private investors like Carl Icahn and Mark Rachesky — co-founder and president of MHR Fund Management — who are considered activist shareholders, have each raised their respective stakes to nearly 15%, raising fears of a hostile takeover of Navistar and forcing the company to adopt a poison pill.

Goenka also stressed that management positions are independently held by Mahindra Navistar company, except for three or four positions, which are managed by Mahindra executives and one Navistar official. "The MD and chief financial officer are from M&M and the head of engineering is from Navistar; the rest are MNAL executives and mostly Indians," added Goenka.

Navistar's US woes won’t affect its JV with Mahindra & Mahindra: Pawan Goenka - The Economic Times
 
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Mahindra Navistar's financial profile deteriorating: Icra

Rating agency Icra has revised the rating for Mahindra Navistar Engines Private Ltd’s (MNEPL) term loans to “A-“ from “A” on significant deterioration in its financial risk profile.

The company incurred higher-than-expected losses in 2011-12, leading to weakening of capital structure and debt coverage indicators, Icra said in a statement.


The rating also factors in account revision in rating for Mahindra Navistar Automotives Ltd from “A+” to “A” on account of muted volume off-take of its medium & heavy commercial vehicles (M&HCVs). MNEPL is a sole supplier of automotive engines.
The ratings also factor in the cyclicality of the M&HCV industry is cyclical and has started showing signs of slowdown. It and is likely to continue in near term.
The ratings, however, continue to favourably factor in the strong technological, managerial and financial support that MNEPL derives from its parents, Mahindra & Mahindra (AA+) and Navistar International Corp (B2/Negative by Moody’s).

MNEPL reported a net loss of Rs. 64.8 crore in 12 months year ended March 2012, up from net loss of Rs 50.4 crore in 2010-11. However, it operating income rose more than three times in FY12 to Rs 116.5 crore from Rs 46.2 crore a year ago.

MNEPL is a 51:49 joint venture between M&M and Navistar Inc. Navistar Inc. is the largest North American producer of mid-range diesel engines and class 6-8 commercial trucks and buses.

Mahindra Navistar's financial profile deteriorating: Icra
 
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M&M to invest Rs 250 cr to upgrade products developed with Navistar

Mahindra & Mahindra (M&M), set to sign an agreement to buy out US-based Navistar Group’s stake in Mahindra Navistar Automotives Limited (MNAL) and Mahindra Navistar Engines Private Limited (MNEPL) by the month-end, will invest Rs200-250 crore over the next three years to maintain and upgrade the products it developed with its erstwhile partner. The homegrown auto major is also exploring opportunities to launch a 16-tonne bus and a commercial vehicle in the intermediate segment (nine-16 tonne), investments for which would be made separately.

Pawan Goenka, president (automotive division), said, “The joint venture has incurred significant losses, but we are committed to supporting operations. We are also looking at going beyond the current portfolio and revisiting two gaps in our product range, a decision on which will be taken over the next two to three months.” MNAL does not have a 16-tonne bus or a commercial vehicle in the intermediate segment. If a decision is taken to develop new products to plug the gap in these two categories, fresh investments would be announced over and above the Rs250 crore set aside for portfolio maintenance, Goenka added.

Last month, M&M had declared plans to buy out its US partner’s 49 per cent stake in the joint ventures for Rs175 crore. Goenka said, “Post the acquisition, the branding of MNAL products would change. The Navistar Group will continue to provide technical support for developing engines. But as far as development of commercial vehicles is concerned, we do not require any assistance and Navistar had not been providing us with any support for the last one and a half years.”

Mahindra Navistar has so far invested over Rs800 crore on new products and engines for the Indian market.

The truck joint venture, however, has been operating at very low utilisation levels, as the commercial vehicle market remains hard to break into for new entrants. Between April and December this financial year, MNAL sold 8,535 units, which is a decline of 10.2 per cent over sales in the corresponding period in FY12.

The two joint ventures (assembly and engine) had reported losses of Rs370 crore in the last financial year, compared to Rs240 crore in FY11.

Mahindra Navistar, which sold 3,500 trucks in FY12, is targeting 40,000 to 50,000 trucks in the next three to four years. Mahindra Navistar has a wide product portfolio of trucks in India, which are pitted against Tata Motors & Ashok Leyland.

M&M will also invest $900 million to develop three new platforms and six engines in collaboration with its South Korean subsidiary, Ssangyong Motor Corporation, and another Rs5,000 crore for developing products indigenously till end-2014.

M&M to invest Rs 250 cr to upgrade products developed with Navistar
 
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Mahindra & Mahindra prepares for long solo ride in the CV business

Mahindra & Mahindra (M&M) is not actively seeking, for now, a new partner to fill the void created by the exit of its JV partner, US-based Navistar International Corporation, in its commercial vehicle business run under the aegis of Mahindra Navistar Automotives (MNAL) till recently.

“But we are not closed to it if an opportunity arises or if it makes business sense. At the moment, we have what we want in terms of both resources and infrastructure,” said Dr Pawan Goenka, president, automotive and FES, M&M, at a press meeting in Delhi.

At present, talks are at an advanced stage with Navistar for the import and marketing of trucks for the South African market with Navistar badging. This is expected to be finalised soon.

“No master agreement exists with Navistar on imports and it will be purely a market to market decision,” said Dr Goenka. The separate JV for engines under Mahindra Navistar Engines (MNEPL) has developed a six-cylinder 7.2-litre engine with variants in 207hp, 170hp and 260hp categories in addition to engines for off-highway applications. A four-cylinder, 4.8- litre engine is close to completion and will be available in several versions.

M&M’s trucks business has 7-8 variants and it plans to add to the product portfolio under a changed branding identity following Navistar’s exit. For trucks, it does not require Navistar’s further support but has an arrangement for continuing support for the existing engine range. Goenka says the 4.8 litre and existing engines could well power the 11-tonne and above truck range. “For beyond 40 tonnes, we will need a new engine but not now.” For the below-11 tonne range, the 3.3-litre Mahindra engine will suffice.

Post-Navistar, M&M has lined up between Rs 200-250 crore investments for developing new variants and in maintaining the current range of vehicles over the next 2-3 years. The company, however, admits that it has gaps in its large buses portfolio and in the 9-12 tonne products; it is looking for ways to bridge the gap. The now-dissolved joint venture recently launched new tippers including haulage trucks.

With the CV business now fully owned by M&M, it has no plans to dilute the current business or opt for reverse merger. Some government approvals are still awaited with the acquisition process expected to be completed in another two months. A new board, slated to meet in April, is expected to revisit all the prior decisions on new bus and truck models.

Navistar and M&M set up the JV in late 2005 to manufacture trucks and buses in India, source components and provide engineering services for the design and development of Navistar vehicle products. The JV for engines was formed in 2007 and engine production commenced in 2010. Goenka attributed the exit of Navistar from the JV to financial problems that did not allow Navistar to make further investments in its Indian joint venture.

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Vishwas

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^^ 9-10 tonnage segment should be surely looked upon to throw a competition.
With the AMW and Eicher(which has recently foraged into this segment) its really tough to market these products.
 
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Re: M&M-Navistar JV’s First Truck Launched

M & M messed up by bringing Navistar at first place. Navistar is not known co. in India in anycase. If they had opted to go alone from beginning, things may have been better.
 
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M&M gets CCI nod for stake buy in Mahindra Navistar Automotive

Fair trade regulator CCI has approved auto major Mahindra and Mahindra's proposal to fully acquire commercial vehicle producer Mahindra Navistar Automotives, saying the deal does not raise anti-competition concerns.

Mahindra and Mahindra would buy the remaining 49 per cent stake in the joint venture with US-based Navistar International Corp. The 49 per cent stake is held by Navistar's indirect subsidiary International Truck and Engine Mauritius Holding (IMH).

In its order dated February 4, Competition Commission of India (CCI) observed that the proposed deal "is not likely to have an appreciable adverse effect on competition in India".

Following the acquisition, Mahindra Navistar -- which is engaged in business of designing, developing and sale of light, medium and heavy commercial vehicles -- would become a wholly owned subsidiary of Mahindra and Mahindra (M&M).

CCI observed that both M&M and Mahindra Navistar operate "in different segments of the commercial vehicle market in India" and would therefore not have an adverse impact on competition.

M&M and its affiliates manufacture and sell passenger cars, commercial vehicles and two/three wheelers. While IMH a subsidiary of US-based Navistar is into investment holding activities.

However, other subsidiaries and affiliates of Navistar produce international brand commercial and military trucks, MaxxForce brand diesel engines among others.

CCI said that apart from its stake in Mahindra Navistar, Navistar is not engaged in business activities in India and following the deal, "both M&M and Navistar would operate in different geographical territories in manufacturing, designing or sale of light, medium and heavy commercial vehicles".

M&M and Navistar had reached the deal in January last year, following which a notice was filed with CCI for its approval.

M&M gets CCI nod for stake buy in Mahindra Navistar Automotive - The Economic Times
 
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Re: M&M-Navistar JV’s First Truck Launched

Mahindra & Mahindra Ltd. (M&M) and Navistar International Corporation announced today that Mahindra has completed its purchase of the Navistar Group’s stake in Mahindra Navistar Automotives Ltd (MNAL) and Mahindra Navistar Engines Pvt Ltd (MNEPL). The deal has received regulatory approval in India and Mahindra has now taken complete ownership of operations and continues to sell MNAL.

“Mahindra remains committed to growing its presence in the Indian commercial vehicle industry with Mahindra’s Truck and Engine businesses continuing to play a critical role in helping us achieve this goal,” said Dr.Pawan Goenka, president, Automotive and Farm Equipment Sectors, Mahindra & Mahindra Ltd. “Mahindra has been a valuable partner these last seven years and they are well equipped to move the MNAL and MNEPL businesses forward as the Indian market continues to develop,” said Troy Clarke, president and chief operating officer, Navistar. “We thank Mahindra for their collaboration and appreciate their support in our decision to redirect our resources to other near-term opportunities for Navistar.” Navistar announced in December 2012 its intention to exit the joint ventures as part of its “Drive to Deliver” turnaround strategy, which is focused on strengthening its North American core businesses and pursuing near-term initiatives to improve the company’s return on invested capital (ROIC) performance.

As announced in December 2012, the agreement allows Navistar to continue sourcing components from India while Mahindra would continue to provide engineering services to Navistar. The Navistar group will continue to support M&M through license agreements and extend necessary support to MNAL and MNEPL for the purposes of business M&M reaffirmed that it is fully committed to the truck and engine companies and would focus on further leveraging synergies between these two businesses and the Mahindra Group in order to make the commercial vehicles business a success. The truck company recently launched a range of new models including the 25T Tipper with Bogie suspension and integrated applications like 31T Coal Haulage Tipper and Transit Mixer. Future plans include the launch of Refrigerated Trucks on the MN25 platform which is a fast growing market. Mahindra, for its truck business, has 59 dealers and nearly a thousand service points across India.
 
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