New Delhi, Nov 2: Utility vehicle maker Mahindra&Mahindra (M&M) 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 the joint venture is pegged at 90 million dollars which will be spread over the next five years.
The joint venture, to be named Mahindra International Engines (MIEL), will be 51 per cent owned by the Mahindra&Mahindra (M&M) and 49 per cent by Navistar, company said in a communique to the Bombay Stock Exchange today.
This is Navistar's second JV with M&M. It's first JV was formed in 2005 to make 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 per cent within two years, due to the strong availability of quality parts and materials from Indian suppliers.
''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,'' Mahindra Group Vice Chairman and Managing Director Anand Mahindra said.
Company's President (Automotive Sector) Dr Pawan Goenka said, ''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 per cent of engine components locally, due to availability of quality parts and materials from Indian suppliers.''