Rumours of a deal along these lines have been circulating for some time. The objective of this collaboration is for the two companies to remain fully independent entities but at the same time reach considerable synergies of scale through high combined volume in manufacturing and sourcing as well as sharing of development costs.

Both companies have agreed to not comment on any specific components or applications at this time for competitive reasons. TNN expects the first fruit of this deal to involve MAN's D20 unit crossing the Atlantic, with a smaller Navistar engine coming to Europe in return.

Navistar is a sleeping giant in the NAFTA market, and recent management changes are reckoned to be indicative of its close to waking status. In addition to its position within NAFTA, it also boasts some depth in Latin America, Australia, New Zealand and South Africa. MAN has no existing presence within North or South America, but instead brings operations in China and India to the deal. As such, this deal forms the foundations for a global operation; highly significant in the light of the mooted single global emissions protocol liable to be introduced in 2012.

Hakan Samuelsson, CEO of MAN commented "With this alliance we aim to reach world class volumes for systems and heavy truck engines, giving us considerable synergies, economies of scale and flexibility in supplying plants." Daniel C. Ustian, Navistar chairman, president and chief executive officer, noted that both International and MAN have extensive experience and expertise and seek to benefit from each other's technologies and combined volumes for economies of scale.

"This agreement is one of a number of opportunities we are exploring for strategic growth in order to achieve long-term success and to meet our goal of reaching $15 billion in revenues and commensurate returns by the end of the current business cycle," he said. Jack Allen, president of International's Engine Group, said "We have a strategic collaboration agreement with MAN and we are exploring a number of opportunities to expand our International engine product line and to offer the value of integrated products for our customers,"

Allen explained. "We see potential opportunities as we collaborate on design, development, sourcing and manufacturing of components and systems."