Navistar and Volkswagen Truck & Bus have announced a strategic alliance, which includes an equity investment in Navistar by Volkswagen Truck & Bus and framework agreements for a procurement joint venture and strategic technology and supply collaboration.

“This alliance with Volkswagen Truck & Bus marks a significant milestone in our company’s history, and we expect it will create multiple benefits for both companies in both the near and long term,” said Troy Clarke, chairman, president and CEO, Navistar.

“Now that the transaction has closed, we will move quickly to collaborate with an industry-leading, strategic partner to increase our global scale, strengthen our competitiveness, and provide our customers with expanded access to cutting-edge products, technology and services.”

Andreas Renschler, CEO of Volkswagen Truck & Bus, said the alliance puts both partners in a stronger position for the future, and provides Volkswagen Truck & Bus with access to the all-important North American market.

The aim of closer cooperation in the supply chain is for both alliance partners to benefit from cost advantages and economies of scale. To this end, Volkswagen Truck & Bus and Navistar have founded joint venture Global Truck & Bus Procurement LLC, which is headquartered in Lisle (Illinois) and will begin work immediately. An alliance board made up of representatives from both companies will drive the strategic alliance forward at operational level.

The companies’ ongoing technology and supply collaboration, which operates out of Stockholm, Sweden, will facilitate collaboration on several aspects of commercial vehicle development, including advanced powertrain technology solutions. Ultimately, it is expected to optimise research and development spend and expand the technology options both companies will be able to offer customers.