A new factory producing MaxxForce diesel engines launched operations on Thursday in Hefei, capital of East China's Anhui province.
The plant, Anhui Jianghuai Navistar Diesel Engine Co Ltd, or JND, is a 50-50 joint venture established by Illinois-based truck and engine maker Navistar International Corp and Chinese automaker Anhui Jianghuai Auotmobile Co Ltd, or JAC.
The 136,000-square-meter facility, the first phase of the joint venture that will get a total investment of 1.8 billion yuan ($293.32 million), houses an administrative office, a 120-member research and development center, and a machining and assembly plant capable of producing 200,000 Euro IV and Euro V compliant engines per year.
The two partners inked an agreement in 2010 to produce diesel engines in Hefei and in 2013 formally launched engine operations at JAC's facilities in Hefei in an effort to meet the emerging needs of the Chinese commercial truck market.
JAC is one of China's 10 largest automakers and enjoys a large share of the global trucks market, while Navistar is one of the United States' largest makers of commercial and military trucks, diesel engines, and school and commercial buses.
"Navistar took a long time to find a partner in China," said Troy Clarke, president and chief executive officer of Navistar, adding, "We find JAC and ourselves are very similar in size, product philosophy and management philosophy, which altogether laid a firm foundation for building a great joint venture."
Clarke believes the venture will be very profitable for both partners, as "China is largest commercial trucks market in the world, though there are a lot of competitors."
He said Navistar is looking forward to supporting China's clean energy and fuel efficiency efforts as the company pursues additional growth opportunities with JAC.
"Through our partnership with Navistar, JND is bringing advanced diesel technology and vehicle integration to our customers," said An Jin, president of JAC.
"These products offer enhanced durability and higher fuel efficiency to enable JAC to export globally and continue leading in China's commercial vehicle market."
In return, Navistar also took some of JAC's truck technology to Mexico.
"To share is the definition of ˇ®joint venture'. We both bring the best to our joint venture and are very willing to share with each other," said Clarke.
JND currently produces 2.8-liter JAC brand diesel engines, and 3.2- and 4.8-liter MaxxForce diesel engines, and is planning to add a MaxxForce 7.2-liter engine to its product line in 2016, according to Joe Werth, CEO of JND.