VW May Be Eyeing Navistar Stake

Volkswagen AG is studying the idea of buying equity in Navistar International Corp., according to the Financial Times Deutschland, which cites no sources.

The German newspaper says ties with Navistar would help VW better compete in the U.S. market with rival Daimler AG, which owns Portland, Ore.-based Freightliner. An industry analyst tells Reuters that a Navistar stake would give VW access to the truckmaker's American distribution network but probably produce little immediate product synergy.

VW has a strong presence in commercial trucking markets in Europe and elsewhere through its own truck unit and controlling stakes in truckmakers Scania in Sweden and MAN in Germany. But VW lacks clout in the North American market, which is dominated by Freightliner, Navistar, PACCAR (Kenworth and Peterbilt) and Volvo (Mack).

Navistar has been struggling with weak sales, difficulty in meeting emission standards for its new diesel engine, recalls and steep warranty costs. The company posted an unexpected $172 million quarterly net loss last week and lowered its forecast for the fiscal year ending Oct. 31.

Navistar's battered share price rebounded 18% to $28.36 on Friday after billionaire investor Carl Icahn disclosed he had hiked his holding in the company to 11.9% from 10%. Icahn urged the company earlier this year to merge with U.S. truckmaker Oshkosh Truck Corp., in which he holds about a 10% stake. Oshkosh opposes a Navistar tie-up.

Separately, Chairman Sergio Marchionne says Fiat Industrial SpA, which owns commercial vehicle maker Iveco, is interested in building its presence the American truck market.