International Will Become Part of the Volkswagen Empire

International Trucks will become part of the Volkswagen empire

The decision this week by shareholders in Navistar means that International will become part of the Volkswagen empire. The decision sees the Traton Group, which includes Scania, MAN and Volkswagen’s commercial vehicle arm, becoming a global truck manufacturer with its manufacturing and market penetration now including North America, the one piece of the jigsaw missing, until now.

Navistar, owners of the International Truck brand, held its annual meeting of stockholders this week and the vote approved Traton’s proposal to acquire all of the outstanding common shares of Navistar at a price of US$44.50 per share in cash. Navistar has said it continues to expect that the transaction will be completed in mid-2021.

The decision comes at the end of an extended rocky period for the International brand in the US. In this period, Australia also saw two relaunches of the International Truck brand, and a third by proxy, when Caterpillar launched here using the International platform and manufacturing facilities.

In the early 2000s, International were number one in heavy duty truck sales in the US and flying. Freightliner were a distant second, nothing could go wrong, but it did.

Firstly, International got into cashflow problems, which kept its financial position under a cloud for several years. Then a series of rudimentary errors in design, plus some questionable decisions in the face of the increasingly tight exhaust emissions regulations which were imposed upon the US truck makers in 2002 and 2010, led to International getting itself into deeper trouble, getting fined and losing major market share.

Since then the brand has remained strong in the medium duty market, but has seen its US heavy duty market share decimated, with Freightliner now making up around 40 per cent of sales.

At the same time, in Europe, Volkswagen engineered a merger between Scania and MAN, quickly followed by the formation of a global group to include its South American truck manufacturing arm by the German automotive giant.

Volkswagen renamed the group as Traton and took on Andreas Renschler as CEO expecting him to replicate his creation of the global Daimler Trucks organisation. He has been at the helm of Traton pursuing the final piece of the puzzle, Navistar, for a number of years and seems to have finally created a fourth global truck manufacturing group to rival Daimler, Volvo and Paccar.

International Trucks will become part of the Volkswagen empire