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Volkswagen picks up stake in US truckmaker Navistar

By AFP

Added 6th September 2016 04:34 PM

The deal will also see VW Truck and Bus, which unites VW's own-brand heavy vehicles as well as Scania and MAN, represented on Navistar's board.

Volkswagen picks up stake in US truckmaker Navistar

The deal will also see VW Truck and Bus, which unites VW's own-brand heavy vehicles as well as Scania and MAN, represented on Navistar's board.

German auto giant Volkswagen on Tuesday said it had bought a 16.6-percent stake in American truck maker Navistar, giving it a foothold in the US market.

As well as the $256 million (229 million euros) investment, VW's Truck and Bus division will also launch a "strategic technology and supply chain co-operation" and a purchasing joint venture with the US firm, the group said in a statement.

The deal will also see VW Truck and Bus, which unites VW's own-brand heavy vehicles as well as Scania and MAN, represented on Navistar's board.

Set for completion in late 2016 or early 2017, the agreement means VW Truck and Bus "will gain access to the key North American market, where it was not previously represented," the group said in a statement.

German rival Daimler currently dominates the US truck and bus market with its Freightliner brand.

But Volkswagen is hunting new opportunities as the effects of its drawn-out diesel emissions scandal linger in the minds of ordinary American consumers, weighing on car sales.

The deal was a "first step to improve the footprint of VW Truck and Bus in the US," analysts at DZ Bank wrote, but "we assess the commercial vehicles business to be less important than VW's car business."

Illinois-based Navistar itself in March paid a $7.5-million fine to the US Securities and Exchange Commission regulator after having lied about its engines' conformity with emissions rules in the early 2010s.

The US manufacturer has been in business since 1902 and builds trucks, coaches, construction equipment and engines for heavy vehicles, including military ones.

With around 17,000 employees, Navistar boasts annual revenues of around $10 billion -- but has seen its share price founder by almost two-thirds over the past two years.

Volkswagen shares enjoyed a one-percent bounce in afternoon trading in Frankfurt to 126.10 euros.

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