Ford Files Against Navistar

The news that Ford has filed suit against Navistar shouldn’t come as a surprise; the Warrenville, Illinois-based manufacturer has been a contender for our favourite basketcase OEM award for a time now. Aided in part by the fact that its previous accountants have had some difficulty adding up, its financials are a mess, and its strategy – whilst commendable from the perspective of an industry attempting to globalise – seems to have been leading it nowhere.

But the Ford suit is a problem. Navistar cannot afford to upset Dearborn, because it – rather like Iveco – is an engine manufacturer with a sideline in vehicles. And the relationship between the two is equally important to both. We estimate that Ford is Navistar’s biggest customer - it has been providing Ford with a six-litre diesel engine for several years, late last year began supplying the carmaker with a new 6.4-litre engine. These end up in the F-Series Super Duty, a product that represents more than 300,000 vehicles worth of annual volume to Ford. 70 percent of Super Duty trucks carry diesel engines. Moreover, both OEMs collaborate in the production of the LCF series – a medium duty forward control product that is becoming increasingly important as the Japanese OEMs begin to show their claws.But if Navistar needs the money, then Ford needs the market access. Following the sale of Sterling to Freightliner / DaimlerChrysler, it was barred from the heavy truck market until 2008. A strategic alliance with Navistar has allowed Ford to retain a foothold in the US truck market, and we note that a number of ex-Ford employees now occupy management positions with Navistar. Given that it has said that it would welcome an approach from a buyer, we had rather assumed that Ford – despite its own well-documented financial issues – would be in the running. If the Super Duty and LCF deals unravel, such a move would seem to be less likely, and Navistar could well end up facing down a less welcome suitor.

KaMAZ Targets India through Tatra-Vectra Tie-Up

Interesting report here about KaMAZ and its plans for India. This is the market to be in at the moment, and it’ll be interesting to see just how the Russian OEM gets on against the indigenous giants – Tata and Ashok – and the newly keen European OEMs – including Volvo, MB, Scania and MAN. Add to this heady mix the Chinese - through Asia Motor Works – and it all adds up to seemingly interesting times ahead.