Volvo, International Sign Engine Deal

AB Volvo’s Powertrain division and Navistar International announced the companies were negotiating a long-term agreement that would make 12-liter and 13-liter Volvo engines available in International Class 8 trucks beginning March 2003.

In a prepared statement, Volvo Group’s president and CEO, Leif Johnson, said the move was a “very exciting development” for the Powertrain unit. Volvo said the engines would all comply with 2002 emissions standards.

“This agreement is part of the consolidation trend we’ve seen in the industry,” said Joe Cacopardo, director of communications for Volvo Trucks North America. In recent months, truck OEMs and component suppliers have announced a number of strategic alliances and agreements. “This is a true purchasing agreement between Volvo Powertrain and International Trucks. Volvo seeks to grow that (engine) business with our customers in all areas,” Cacopardo said, noting that Volvo also makes engines for the construction and marine markets.

A release from Navistar International, the parent company of International Truck and Engine Corp., said the trend toward strategic relationships and worries over meeting emissions requirements prompted the agreement. “In the face of industry consolidation and concerns regarding future emissions standards and timing, we want to ensure that International customers and dealers have access to a 12- to 13-liter Class 8 engine,” the company said. International will continue to offer diesel engines from other suppliers, the company said.

Volvo said the engines will be produced initially at Volvo Powertrain’s plant in Skovde, Sweden, but will eventually be produced in North America. No other details of the deal were released.