Businessweek

Navistar International Corporation engages in the manufacture and marketing of commercial and military trucks, buses, diesel engines, and recreational vehicles (RV), as well as service parts for all makes of trucks and trailers. The company is also a private-label designer and manufacturer of diesel engines for the pickup truck, van, and sport-utility vehicle (SUV) markets. In addition, it provides retail, wholesale, and lease financing of its trucks and parts. The company's principal operating subsidiaries include Navistar, Inc. and Navistar Financial Corporation (NFC). Operating Segments The company operates in four industry segments: Truck, Engine, Parts, and Financial Services. Truck The Truck segment manufactures and distributes a line of Class 4 through 8 trucks and buses in the common carrier, private carrier, government, leasing, construction, energy/petroleum, military vehicle, and student and commercial transportation markets under the International and IC Bus (IC) brands. This segment also produces RVs, including non-motorized towables, under the Monaco RV family of brands, and concrete mixers under the Continental Mixers brand. It also intends to offer refuse truck bodies under the E-Z Pack brand. The Truck segment's manufacturing operations in the U.S. and Mexico (North America) consist principally of the assembly of components manufactured by its suppliers, and the production of certain sheet metal components, including truck cabs. The products the company sells to the U.S. military are derivatives of its commercial vehicles. The company also sells International and CAT branded trucks through its alliance with Caterpillar Inc. in North America and other global markets. The company also has a joint venture with Mahindra & Mahindra Ltd. (Mahindra) called Mahindra Navistar Automotives Ltd. The company markets its commercial products through its independent dealer network in North America, which offers a range of services and other support functions to its end users. The company’s commercial trucks are distributed in virtually all key markets in North America, as well as select markets outside of North America, through its distribution and service network retail outlets, which comprised 784 in the U.S. and Canada, 86 in Mexico, and 292 international locations, as of October 31, 2012. The company occasionally acquires and operates dealer locations (Dealcors) for the purpose of transitioning ownership. In addition, its network of used truck centers and International certified used truck dealers in the U.S. and Canada provides trade-in support to its dealers and national accounts group, and markets all makes and models of reconditioned used trucks to owner-operators and fleet buyers. Competition: The company's major U.S.-controlled domestic competitors include PACCAR Inc. (PACCAR) and Ford Motor Company (Ford). Competing foreign-controlled domestic manufacturers include Freightliner and Western Star (both subsidiaries of Daimler-Benz AG (Mercedes Benz)); Volvo and Mack (both subsidiaries of Volvo Global Trucks); and Hino (a subsidiary of Toyota Motor Corporation (Toyota)). Major U.S. military vehicle competitors include BAE Systems, Force Protection, Inc., General Dynamics Land Systems, and Oshkosh Truck. In addition, smaller, foreign-controlled market participants, such as Isuzu Motors America, Inc. (Isuzu), UD Trucks North America (a subsidiary of AB Volvo), and Mitsubishi Motors North America, Inc. (Mitsubishi) are competing in the U.S. and Canadian markets with primarily imported products. For the RV business, its major competitors include Thor Industries, Inc., Forest River, Inc., Tiffin Motorhomes, Inc., Winnebago Industries, Inc., and Fleetwood RV, Inc. In Mexico, the major domestic competitors are Kenmex (a subsidiary of PACCAR) and Mercedes Benz. Engine The Engine segment designs and manufactures diesel engines across the 50 through 500 horsepower range under the MaxxForce brand name for use primarily in its International branded Class 6 and 7 medium trucks, Class 8 heavy trucks, and military vehicles, its IC branded school buses, as well as other applications. In addition