Navistar International Corporation through its subsidiary International Truck and Engine Corporation signed a joint venture agreement with the company to manufacture diesel engines for medium and heavy commercial trucks and buses in India, M&M said in a communique to the Bombay Stock Exchange.
The joint venture, to be named Mahindra International Engines Ltd, would be owned 51 per cent by the Mahindras and 49 per cent by Navistar, the company added.
"Our plant in India will produce world-class engine models for both the Indian and global export markets. 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.
M&M President Automotive Sector Pawan Goenka said this JV marks the second significant partnership between M&M and the Navistar affiliate, following one in 2005.
The new company's technologically advanced diesel engines will power full line of trucks and buses produced by the preceding JV by 2009, he added.
M&M's sourcing expertise would help the JV source up to 85 per cent of engine components locally, Goenka said.
Navistar is North America's largest combined commercial truck, school bus and mid-range diesel engine producer.
Shares of M&M were last trading down 1.56 per cent at Rs 753 on the BSE.
