The two companies have invested $25 million to expand a factory in the southern Brazilian city of Canoas. The factory will begin producing 7.3 liter, V-8 turbo diesel engines by the end of the year and is expecting to export 100,000 engines to North America over the next four years.
Under the joint venture, Navistar acquired a 50% interest in Maxion Motores Ltda. from Iochpe-Maxion S.A. Maxion Motores, the diesel engine market share leader in the Mercosul market, manufactures diesel engines for Ford Motor Co., General Motors Corp., Mercedes-Benz and AGCO in South America. Maxion Motores will be renamed Maxion International Motores S.A.
The joint venture is part of Navistar's growing presence in South America. The company created a subsidiary, Navistar do Brasil, in 1997; entered into a third party contract manufacturing arrangement early in 1998; and began distributing International brand medium and heavy trucks in Brazil in September 1998.