Mahindra and Mahindra Navistar JV

Mahindra & Mahindra Ltd has announced that a wholly owned affiliate of Navistar International Corporation (Other OTC: NAVZ), on November 01, 2007, signed a joint venture agreement with Mahindra & Mahindra Ltd of India to produce diesel engines for medium and heavy commercial trucks and buses in India.

The joint venture, to be named Mahindra International Engines Ltd. (MIEL), will be 51 percent owned by the Mahindra & Mahindra (M&M) and 49 percent owned by Warrenville, III-based Navistar, North America's largest combined commercial truck, school bus and mid-range diesel engine producer. The combined investment of the two Companies will be $90 million over the next five years.

This marks the second such joint venture with M&M, India a leading automotive manufacturer, following a 2005 JV that today makes light, medium and heavy commercial vehicles for India and export markets. The new Company's advanced diesel engines will power the full line of trucks and buses produced by the preceding JV beginning in 2009. Engine components will be sourced locally, going up to 85 percent within two years, due to the strong availability of quality parts and materials from Indian suppliers.

Anand Mahindra VC & MD, Mahindra Group, said "This JV marks a significant milestone in M&M's quest to emerge as a leading customer-centric organization. Our state-of-the-art plant in India will produce world-class engine models for both the Indian and global export markets. The JV will not only extend our existing partnership with Navistar but the resulting synergies will also see MIEL emerge as a force to reckon with in the global OEM market."

Dr. Pawan Goenka, president, Automotive Sector, M&M, said "This JV marks the second significant partnership between M&M and the Navistar affiliate, following a 2005 JV. The new Company's technologically advanced diesel engines will power the full line of trucks and buses produced by the preceding JV by 2009. M&M's sourcing expertise will help the JV source up to 85 percent of engine components locally, due to availability of quality parts and materials from Indian suppliers. This will give us a strong competitive edge in the domestic market and help us leverage economies of scale."