Analysts believe that General Motors Company (NYSE:GM) about to announce a commercial truck partnership with Navistar International.
The Automotive manufacturer recently announced a partnership with ISUZU MOTORS LTD ADR (OTCMKTS:ISUZY) where the two will work together to develop new-generation cab over medium-duty truck. Sources believe that the partnership with Navistar will also focus on the production of medium-duty trucks. A spokesperson from General Motors said that the company had not made any announcements regarding the matter and that there is currently no information to be shared. Regardless, analysts speculate that the two firms will soon announce the partnership if the plans follow through.
The demand for commercial trucks has been on the rise as the economy picks up the pace. For this reason, truck manufacturing companies are scrambling to take advantage of the demand. Navistar recently engaged in a joint venture with Ford Motor Company (NYSE:F) to build F-650 and F-750 Ford trucks at the Mexican plant where the International Dura Star medium-duty truck was built. Ford’s production for the F-650 and F-750 trucks was transferred to its Avon Lake plant in Ohio.
Navistar is said to be seeking a production partnership with other automobile companies to spread out the development cost and maximize the production capacity. It is not clear which between GM and Navistar initiated the partnership talks. Navistar had previously used diesel engines with an EGR emissions system that did not necessitate a urea exhaust after treatment. The idea was centered on reducing the extra service procedure to save drivers an extra coin. Unfortunately, the system was unable to satisfy stringent emission standards thus the company dropped the technology.
A partnership between Navistar and General Motors would mark GM’s second partnership in the Medium truck business. Such partnerships in the automobile industry are perhaps an indirect response to a plea by the Chief Executive of Fiat Chrysler Automobiles NV (NYSE:FCAU), Sergio Marchionne. During one of the automotive industry conferences, he urged automotive companies to collaborate so as to reduce vehicle production costs as the industry becomes more competitive.