The Engine group of Navistar International Corp. (NAV: 49.57 -0.60 -1.20%)has entered a six-year agreement with Turkish commercial and military vehicles manufacturer, Otokar, to supply diesel engines. Otokar is a member company of the Turkey-based industrial conglomerate, Koç Holding A.Ş.Under the agreement, Navistar will supply MaxxForce diesel engines for Otokar buses, which will be sold both domestically and internationally. The engines will be supplied by Navistar’s South American affiliate, MWM International Motores.
Navistar will provide two types of four-cylinder engine models, MaxxForce 3.0 and MaxxForce 3.2, to Otokar. The MaxxForce 3.0 engine model meets Euro III emission standards and will be used to power 6.5-ton Minibuses and 9-ton Midbuses for export to North Africa and the Middle East.
The MaxxForce 3.2 engine model will be based on a Exhaust Gas Recirculation (EGR) platform that meets Euro V emission standards. It will be used to power Otokar Midbuses for the domestic market and for export to European markets.
Navistar plans to begin production of MaxxForce 3.0 engines from March next year, while MaxxForce 3.2 engines will be produced from the first quarter of 2012.
Navistar is strategically positioned to access global markets with the advancement of emission standards. The company’s products are capable of meeting the Euro emission standards as well as 2010 diesel engine emission standards, set by the Environmental Protection Agency (EPA).
In the second quarter of fiscal 2010 ended April 30, Navistar posted a profit of $30 million or 42 cents per share, which doubled from the year-ago profit of $12 million or 16 cents per share. It also reflected a marked improvement compared with the Zacks Consensus Estimate of a loss of 5 cents per share. This was attributable to a strong performance in its core business as well as an improved cost structure.
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