Navistar International Corporation operates as an international manufacturer of International brand commercial trucks, proprietary diesel engines, and IC Bus (IC) brand school and commercial buses, as well as a provider of service parts for trucks and diesel engines. The company also provides retail, wholesale, and lease financing services for its trucks and parts.
Products and Services
The company’s principal products and services comprise:
Trucks—The company manufactures and distributes Cla...
Navistar International Corporation operates as an international manufacturer of International brand commercial trucks, proprietary diesel engines, and IC Bus (IC) brand school and commercial buses, as well as a provider of service parts for trucks and diesel engines. The company also provides retail, wholesale, and lease financing services for its trucks and parts.
Products and Services
The company’s principal products and services comprise:
Trucks—The company manufactures and distributes Class 4 through 8 trucks and buses in the common carrier, private carrier, government, leasing, construction, energy/petroleum, and student and commercial transportation markets under the International and IC brands. The company designs and manufactures proprietary diesel engines for its International branded trucks and IC branded buses.
Parts— The company supports its International brand commercial trucks, IC brand buses, and its proprietary engines, as well as its other product lines, by distributing proprietary products together with a selection of other standard truck, trailer, and engine service parts.
Financial Services— The company provides and manages retail, wholesale, and lease financing of products sold by the Truck and Parts segments, as well as their dealers, within the U.S., Canada, and Mexico.
Segments
The company operates through four industry segments: Truck, Parts, Global Operations (collectively referred to as ‘Manufacturing operations’), and Financial Services, which consists of Navistar Financial Corporation (NFC) and the company’s foreign finance operations (collectively referred to as ‘Financial Services operations’).
Manufacturing Operations
Truck segment
This segment manufactures and distributes Class 4 through 8 trucks and buses along with the production of proprietary engines, primarily in the North America markets that include the U.S., Canada, and Mexico. This segment also includes the company’s truck export business under the International and IC brands. The proprietary engines produced in North America are primarily used in the company’s trucks and buses.
The Truck segment's manufacturing operations also include the production of diesel engines, which are primarily used in the company’s trucks. The operations at the company’s engine manufacturing facility consist principally of the assembly of components manufactured by the company’s suppliers, as well as machining operations relating to steel and grey-iron components. The company markets and distributes its commercial products through the company’s dealers and directly to large fleets both domestically and internationally. Additionally, through the company’s dealer network of 1,052 outlets in the U.S. and Canada, which includes 342 of Love’s Travel Stops locations, 89 outlets in Mexico, and the company’s export truck operations, primarily in Latin America, the company provides a range of services and other support functions. In addition, the company’s network of used truck centers and International certified used truck dealers in the U.S. and Canada provides trade-in support to the company’s dealers and national accounts group, and markets all makes and models of reconditioned used trucks to owner-operators and fleet buyers.
Competition
In the company’s primary truck export market of Latin America, the company competes with various truck manufacturers, including PACCAR Inc. (PACCAR), Freightliner (subsidiary of Daimler-Benz AG (Mercedes Benz)), and Mack.
Parts segment
This segment provides customers with proprietary products needed to support the International commercial truck, IC Bus, proprietary engine lines, and export parts business, as well as the company’s other product lines by providing customers with proprietary products together with a selection of other standard truck, trailer, and engine service parts. The company distributes service parts through the dealer network that supports the company’s trucks and engines.
The company has a parts sales team within North America, as well as national account teams focused on large fleet customers. The company also serve its global markets through its export business, which supports customers globally in Latin America, the Middle East, northern Africa, South Africa, Europe, Australia, Asia and Russia. In conjunction with the Truck sales and technical service group, the company provides an integrated support team that works to find solutions to support the company’s customers.
The company sells a substantial amount of all-make parts for light-, medium- and heavy-duty trucks (All-Make parts), which are common across OEM (original equipment manufacturer) truck manufacturers. The company sells remanufactured parts through its ReNEWed product line and private label products through the company’s Fleetrite brand name. The dealers and fleets have multiple outlets to purchase All-Make parts, including other OEMs (including but not limited to Freightliner, PACCAR, and Mack and Volvo (both subsidiaries of Volvo Global Trucks)), independent distributors, and traditional retail outlets, including Fleetpride, TruckPro, and National Auto Parts Association. The company sells a range of proprietary parts.
Also included in the Parts segment is the company’s Blue Diamond Parts, LLC (BDP) joint venture with Ford, which manages the sourcing, merchandising and distribution of certain service parts for North America Ford diesel vehicles. Major competitors for the company’s BDP joint venture include Alliant Power, Jasper Engine Transmissions, and Delphi Automotive. In October 2019, Ford notified the company of its intention to dissolve the BDP joint venture effective October 2021.
Global Operations segment
This segment includes businesses that derive revenue from outside the company’s Truck and Parts segments and primarily consists of the operations of the company’s wholly-owned subsidiary, International Industria Automotiva da America do Sul Ltda. (IIAA). IIAA is a leader in the South American mid-range diesel engine market, manufacturing and distributing mid-range diesel engines and providing customers with additional engine offerings in the agriculture, marine, genset, and light truck markets. Additionally, the company sells its engines to global OEMs for various on-and-off-road applications.
The company offers contract manufacturing services under IIAA's MWM brand to OEMs for the assembly of their engines, particularly in South America. IIAA has a primary dealer network and parts distribution center, responsible for internal and export sales of spare parts. As part of the Global Operations segment, IIAA has engine manufacturing operations in Brazil.
The company’s commercial products are marketed through its independent dealer network, which offers a range of services and other support functions to the company’s end users.
IIAA also has a commercial agreement with an Indian company, Mahindra Heavy Engines Ltd., under which MWM engines (4.8L and 7.2L) are manufactured at a plant located in the Chakan Industrial Area in the city of Pune, India. The engines produced at that plant are sold by MWM outside of the Indian market, providing an export platform in support of the Asian markets.
In Brazil, IIAA's engines compete with Cummins Inc. (Cummins), Mercedes Benz, and Fiat Powertrain (FPT) in the light and medium truck markets; Mercedes Benz, Cummins, Scania, MAN, Volvo, and FPT in the heavy truck market; Mercedes Benz in the bus market; New Holland (a subsidiary of CNH Industrial N.V.), Sisu Diesel (a subsidiary of AGCO Corporation), and Deere & Company in the agricultural market; and Scania and Cummins in the stationary market.
Financial Services segment
This segment provides and manages wholesale, retail, and lease financing of products sold by the Truck and Parts segments and their dealers. The company also finances wholesale and retail accounts receivable.
NFC provides wholesale financing for 100% of new Truck inventory sold to the company’s dealers and distributors in the U.S. through the customary free interest period offered by Navistar, Inc. The Financial Services segment also facilitates financing relationships in other countries to support the company’s Manufacturing Operations.
The Financial Services segment manages the relationship with Navistar Capital (a program of BMO Harris Bank N.A. and Bank of Montreal (together, ‘BMO’)). Navistar Capital is the company’s third-party preferred source of retail and lease customer financing for equipment offered by the company and its dealers in the U.S. In addition, Navistar Capital Canada (also a BMO program) provides financing to support the sale of the company’s products in Canada.
Strategy
The company’s strategy to communicate its clear value proposition has expanded to include electric vehicles and self-driving technology, laying the foundation for the transportation infrastructure of the future.
Engineering and Product Development
The company’s engineering and product development costs were $321 million in 2020.
Government Regulation
The company is subject to the National Traffic and Motor Vehicle Safety Act and Federal Motor Vehicle Safety Standards promulgated by the National Highway Traffic Safety Administration.
The company is complying with the U.S. Environmental Protection Agency and the National Highway Traffic Safety Administration greenhouse gas emissions rules through use of existing technologies and implementation of technologies as they become available.
History
Navistar International Corporation was founded in 1902. The company was incorporated under the laws of the state of Delaware in 1993.
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