Mahindra & Mahindra (M&M), on Friday, announced that it has formed a joint venture with US-based Navistar International Corporation to produce diesel engines for medium and heavy commercial trucks and buses in India.
The combined investment in this joint venture, to be named Mahindra International Engines Ltd (MIEL), has been pegged at $90 million, which will be spread over the next five years, said a press release issued by M&M.
M&M will hold majority 51 per cent stake in the JV and Navistar will hold the balance.
Incidentally, this is Navistar’s second JV with M&M, while the first JV was formed in 2005. “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,” said Mr Anand Mahindra, VC & MD, Mahindra Group.
The new company’s advanced diesel engines will power the full line of trucks and buses produced by the preceding JV beginning 2009. Engine components will be sourced locally, going up to 85 per cent within two years, due to the strong availability of quality parts and materials .
