Dow Jones Newswires | Navistar International Corp. plans to
offer a new line of commercial trucks aimed at penetrating the
lighter-weight end of the medium-duty truck market.
Navistar said the new line is part of broader strategy to emphasize
smaller, lighter vehicles across all its truck and bus lines in North
America. Chairman and Chief Executive Dan Ustian said truck users are
increasingly looking for smaller trucks with more fuel-efficient
engines.
“Weight, weight, weight. That’s all our customers talk about,” Ustian said Wednesday during a conference call with Wall Street analysts. “They need something less 1/8 for 3/8 lighter, regional, shorter runs. It used to be highway 1/8 speeds 3/8 of 70 and 80 miles an hour. Not anymore.”
Ustian said growing traffic congestion in the U.S. is reducing the need for trucks built primarily for high-speed, long-haul trips.
Other truck builders also apparently are eyeing lower weight classes. Volvo Trucks North America is evaluating options for medium-duty models in its Mack truck lineup, according to a report Tuesday by AutomotiveWorld.com. Mack and Volvo currently offer only heavy-duty trucks in North America.
Navistar’s new TerraStar line will feature trucks with a gross weights from 14,001 pounds to 19,500 pounds. Such trucks are larger than pickup trucks and are typically used as tow trucks, utility service repair vehicles, ambulances and general construction trucks.
Navistar expects to begin selling two-wheel drive versions of the trucks by early fall; four-wheel drive models will be added in 2011. The company hasn’t identified where the trucks will be built.
Navistar is hoping to move into the anticipated vacuum in the medium-duty market created by General Motors Corp.’s plans to close its commercial truck business. But Ford Motor Co. (F) remains a force in the market, along with Japan’s Mitsubishi Fuso trucks and other foreign-based truck builders.
“It’s a good move for Navistar,” said Dennis Huibregtse, an analyst in Michigan with truck market forecaster Power Systems Research. “It’ll be keenly competitive though because Ford is a mass producer. The question is can Navistar get its price down initially to where it can compete with Ford and the others.”
Navistar maintains its trucks will be able to compete because the TerraStar models will draw heavily from components and designs already in use on other Navistar trucks, including the company’s 6.4-liter and 7-liter diesel engines.
“It’s a great way to leverage the assets that we have and get our costs right, so we can make some money on this sector,” Ustian said.
Navistar also intends to introduce a smaller school bus and a small commercial bus typically used for airport shuttle service. Navistar, which dominates the full-size school bus market and holds a leading share in heavyweight side of the medium-duty truck market in the U.S., said many of the biggest users of lighter commercial trucks are already Navistar customers for larger trucks.
Navistar on Wednesday reported sharply lower sales and income for its fiscal first quarter. Navistar’s stock closed down 5.29 percent, or $2.34, at $41.91 a share.
