Navistar Subsidiary Signs Licensing Agreement with One of China's Largest Diesel Engine Makers

WARRENVILLE, Ill.--Dongfeng Chaoyang Diesel Co. (DCD), one of China’s largest diesel engine makers, and MWM International Industria De Motores Da America Do Sul Ltda.(MWMI), a subsidiary of Navistar International Corporation today announced that DCD has been licensed to manufacture and sell select diesel engines in China.

Under the licensing agreement, an MWMI affiliate and DCD will establish strategic cooperation in the areas of engine development and vehicle application for diesel engines on Chinese vehicles.

Specific terms of the agreement are not being disclosed by either company, and the agreement is subject to Chinese Government approval.

“I consider this strategic cooperation with DCD a big step forward in our growth strategy of utilizing our assets and what others have developed as we tap the growth markets in China,” said Daniel C. Ustian, Navistar chairman, president and chief executive officer. “This aligns with our strategy of providing great products to our customers, and a competitive cost structure to assure profitable growth for investors.”

Initial estimated annual volumes are expected to be 40,000 to 50,000 engines per year and start of production is forecasted in early 2008. The agreement may be extended to other engine families and other countries in the region.

“This agreement broadens our lineup and gains us valuable strategic global partners,” said Mr. Zhao Zhuang, president of Dongfeng Chaoyang Diesel Co. “As a major diesel engine maker in China, we will continue to provide our customers with the world’s leading lineup of light commercial vehicle diesel engines.”

MWMI produces a broad line of medium and heavy duty diesel engines ranging from 50 to 375 horsepower for use in pickups, SUVs, vans, light, semi and heavy trucks, and buses as well as agricultural, marine and electric generator applications. OEM customers include a number of the most important corporations in the automotive, agricultural and industrial segments, including Ford, General Motors, Land Rover, Volkswagen, Volvo, Nissan, CNH and AGCO.

“The acquisition of MWMI last year broadens our global offering of engines and helps us to execute our growth strategy,” said Jack Allen, president, International Engine Group. “Our licensing agreement with DCD reflects International Truck and Engine Corporation’s stepped-up global sales and marketing efforts to grow our business around the world.”

“We are establishing this strategic cooperation to use each other’s strengths,” said Waldey Sanchez, president and CEO of MWMI. “Our ability to grow outside of Brazil, share our technology and leverage our products to serve Euro certified markets is important, and our agreement with DCD reinforces the value we offer global markets.”

International Truck and Engine Corporation, through its affiliated companies is the world's leading diesel engine maker across the 50 to 375 horsepower range. In North America, International and its affiliates have nearly 50 percent share of the diesel pickup engine market, and 40 percent of the market for medium-duty commercial trucks and buses. In South America, International and its affiliates have more than 50 percent market share in the mid-sized pickup/SUV segment and accounts for nearly 40 percent of all diesel engines produced.

Navistar International Corporation is the parent company of International Truck and Engine Corporation. The company produces International® brand commercial trucks, mid-range diesel engines and IC brand school buses and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. A wholly owned subsidiary offers financing services. Additional information is available at www.nav-international.com.