Navistar International Will Make Trucks in Brazil
10 September 1997
Navistar International Will Make Trucks in Brazil
CHICAGO, Sept. 10 -- Navistar International Corporation
, the leading producer of medium and heavy trucks and mid-range
diesel engines in North America, today announced it will build and sell
commercial trucks in Brazil beginning in 1998 as part of its strategy to
expand internationally.
The company announced its Brazilian plans following a ceremony with the
state government of Rio Grande do Sul, where Navistar will build trucks
under a contract-assembly agreement with Brazilian equipment manufacturer
Agrale, S.A., at an Agrale facility in Caxias do Sul. Terms of the agreement
were not disclosed.
In deciding to manufacture trucks in Brazil, Navistar gains access to
countries included in the Mercosul trade agreement, which eliminates trade
barriers among the countries.
"Navistar will enter the market next year with one of the broadest product
lines of trucks available to Brazilian customers, supported by a sales and
service dealer network in major Brazilian cities," said Navistar Chairman,
President and Chief Executive Officer John R. Horne. "We intend to serve our
customers not only in Brazil, but throughout South America."
Horne said international expansion is a key part of Navistar's truck
strategy, and the move into Brazil and other South American markets is a
natural next step in line with that initiative. This move comes two years
after Navistar's decision to enter Mexico through similar contract
manufacturing.
Last year Navistar announced its five-point truck strategy, with a focus
on expanding its presence in Mexico. Navistar will open a new $167 million
(U.S.) manufacturing plant next year near Monterrey, Mexico, to serve Mexico,
Central America, Columbia and Venezuela.
Agrale Contract Speeds Market Entry
Navistar said it evaluated a variety of market-entry strategies leading up
to its contract-manufacturing agreement with Agrale.
"We are very pleased to be working with an established, respected
manufacturer like Agrale," said Don DeFosset, Navistar executive vice
president and president of the truck group. "The agreement offers mutual
advantages: it enables Navistar to gain fast entry into a strategically
vital market under terms that give us full control of the products, and it
allows Agrale to use its facilities more effectively."
The Agrale factory in Caxias do Sul combines modern manufacturing
facilities with good geographic access to customers, component suppliers and
labor. Work will begin before the end of 1997 to convert the factory to fit
Navistar's production requirements. The first Navistar trucks are expected to
roll off the assembly line in mid-1998.
Agrale, a privately owned Brazil-based company, has a 35-year history of
manufacturing light trucks, farm tractors, motorcycles and light diesel
engines.
In addition to its manufacturing agreement with Agrale, Navistar said it
also has secured or is close to securing vendor agreements with local
suppliers of such key components as diesel engines, axles, transmissions,
drivelines, suspensions, brakes, tires and wheels.
Trucks Offer Competitive Advantages
Navistar's initial product offerings in Brazil will include North
America's leading medium truck line, the International(R) 4000 series, and its
International(TM) 9000 series premium conventional heavy trucks. The
company said these models will meet the needs of Brazilian truck buyers.
Both the International 4000 and 9000 series models feature significant
fuel-economy, payload and durability advantages over competitive models
currently available in Brazil. The International 4000 series
models will be powered by Navistar's electronic mid-range diesel engine, which
offers a combination of power, high fuel economy and low emissions.
Navistar's U.S. based manufacturing facilities will supply stampings and
diesel engines for the new Brazilian operation.
Navistar International Corporation, with world headquarters in Chicago,
and annual sales of $5.8 billion, is the leading North American producer of
heavy and medium trucks and school buses. Navistar maintained its position as
the sales leader in the combined United States and Canadian retail markets for
medium and heavy trucks and school buses through the first nine months of
1997, achieving a 27.1 percent share that is consistent with the same period a
year ago. The company also is a worldwide leader in the manufacture of
mid-range diesel engines, which are produced in a range of 160 to 300
horsepower.
SOURCE Navistar International Corporation
