Navistar International Corp. completed an overhaul of its International truck brand line Wednesday with the unveiling of its International MV, a medium-duty work truck at the Work Truck Show in Indianapolis.
The MV is the capstone of a strategy to rebuild the truck manufacturer following a series of strategic errors that cost it more than $2 billion and cut its market share of the heavy-duty truck and bus business in half.
The new work truck is the last of four vehicles developed under Project Horizon, a plan to introduce a series of steel cab heavy-duty trucks designed for driver comfort and connectivity that was launched at the 2013 Mid-America Trucking Show.
“We came out and said we are going to be the most driver centric and customer centric company in the business, and we reshaped the entire product portfolio,” Persio Lisboa, Navistar’s chief operating officer, told Trucks.com.
The program paid off. Navistar went from a loss of $97 million in 2016 to a $30-million profit last year, its first since 2011.
Navistar “has enough firepower to offset fears of a peaking truck cycle, thanks to share gains driven by a refreshed product lineup and a new engine,” said Alexander Potter, a senior research analyst at the Piper Jaffray & Co. investment house.
Customers are coming back.
“The customers come in and really like the trucks and how they are driver focused and more reliable,” said Tom Bagwell, executive vice president of Peterson Trucks in San Leandro, Calif. The company has four Navistar dealerships in California.
Late last year, US Xpress, a large Chattanooga, Tenn., trucking company, reached a multi-year deal worth more than $200 million to purchase 1,665 International LT semi-tractors.
Navistar’s share of the U.S. and Canadian market for trucks and buses in the Class 6 through 8 weight segments rose to 17 percent from 16 percent last year, its first uptick since 2009.
“We know how to recover our market share. We're executing those plans,” said Troy Clarke, Navistar’s chief executive.
Navistar got into trouble almost a decade ago when it launched plans to use engines that relied on a system called exhaust gas recirculation, or EGR, to control nitrogen oxide emissions.
Other brands used diesel truck engines with a different system known as selective catalytic reduction. The Navistar engines had a variety of performance and reliability issues that forced the company to abandon the technology and spend huge sums repairing and buying back trucks.
The MV gives Navistar the newest and most refreshed truck line in the country, according to the company’s executives. It replaces the DuraStar work truck in the International lineup.
Production of the MV has already begun at Navistar’s Springfield, Ohio, plant. The first deliveries are scheduled for this spring.
Navistar forecasts industrywide North American sales of medium-duty trucks will reach 85,000 to 90,000 vehicles this year.
The Lisle, Ill., company wants to capture about 25 percent of that market with its new MV, said Lyndi McMillan, a company spokeswoman.
“The medium-duty market is kind of our bread and butter — this is a market we do really well in,” McMillan told Trucks.com.
Its main customers include leasing and rental companies like Penske and Ryder, as well as municipalities.
The MV offers a choice of two Cummins engines, including a 6.7-liter six-cylinder that produces up to 360 horsepower and 750 pound-feet of torque. The 9-liter engine option has up to 350 horsepower and 1,000 pound-feet of torque.
The MV includes a proprietary electrical system called Diamond Logic, which allows buyers to add custom safety controls for their specific industries.
A utility company, for example, might buy an MV truck equipped with a hydraulic boom lift to give employee access to high places such as on power lines. Controls can be put on the vehicle that prevent the driver from putting the truck into gear until the boom is lowered.
Navistar is also working with its business partner Volkswagen Truck & Bus to develop an electric version of the MV for North America. It could debut in late 2019 or early 2020, the truck maker said.
The companies formed a business alliance when the German automaker purchased 17 percent of Navistar for $256 million and took two seats on the company’s board of directors last year. Besides its own label, Volkswagen also owns the MAN and Scania truck brands.
Navistar plans to launch another truck later this year. It is developing a small work truck in conjunction with General Motors.
Chevrolet Commercial Vehicles unveiled its version of the truck, the Silverado 4500HD and 5500HD chassis cab trucks, at the work truck show this week. The General Motors division is jumping into a market that it sees as complementary to its sales of lighter-duty Silverado pickup trucks.
Navistar will build the chassis and assemble the vehicles at its factory in Springfield, Ohio.
It’s part of a plan to rebuild Navistar’s portfolio to serve a broad segment of the truck market.
“Everyone is positive about the future,” said Michael Cancelliere, president of Navistar’s truck and parts business. “It will always be a competitive industry. Where we want to get to is regain our leadership position in the industry and make significant strides in financial performance.”