Caterpillar to exit US highway engine business, form alliance with Navistar

12 June 2008

Caterpillar has announced that it will not supply EPA 2010 compliant engines to truck and other on-highway original equipment manufacturers. Instead, the company will pursue global truck business opportunities with Navistar.

To that effect, Caterpillar and Navistar have signed a Memorandum of Understanding (MOU). The two companies intend to cooperate focusing on global truck opportunities, including North American severe service construction trucks, as well as technology development for engines worldwide.

Through this alliance, Caterpillar plans to target a 2010 introduction of a North American Cat branded heavy-duty truck for severe service applications, such as road construction, large infrastructure projects and oil and petroleum development.

Caterpillar and Navistar will also work together to develop, manufacture and distribute commercial trucks in select regions outside of North America. The product offering would include a full line of medium and heavy-duty trucks in both conventional and cab over designs.

Under the alliance, Caterpillar and Navistar plan to cooperate on development of mid-range engines for diesel applications, such as school buses and utility trucks. The engines would not utilize urea-based selective catalytic reduction (SCR) technology for NOx control, said Caterpillar.

Two emission technologies will compete in US 2010 engines: with and without urea-SCR. Manufacturers who adopted the non-SCR path are expected to certify their engines in 2010 at around 0.5 g/bhp NOx, and fill-in the gap to the 0.2 g standard using accumulated NOx emission credits, until the time engine technology is further refined to achieve the 0.2 g NOx limit.

Caterpillar said that in the last 15 years it has become less dependent on the sale of on-highway truck engines in the total contribution of its global engine profitability. The company now supplies approximately 400,000 diesel engines annually outside of the on-highway truck market.

Source: Caterpillar