Navistar first licensed its engine to Dongfeng Chaoyang Diesel Co, a JAC engine supplier, and then hooked up with JAC.

The joint-venture products will incorporate Navistar MaxxForce engines as well as its suspension and braking systems, Von Meister says. For buses, bodies will be imported from the US, "with some adaptation to the Chinese industry standards".

Navistar now has 48 percent of the school-bus market in North America, the company says. There has been a spate of serious school-bus accidents in China in the past year, and the government has tightened safety requirements, providing an opening for Western school-bus manufacturers.

Asked about the buses, Von Meister says: "We came not to make the Rolls-Royce-level bus in China, because the market doesn't want it; if the market wants a Chevrolet-level bus we will do it."

With the buses, the company has been working closely with Chinese industry safety experts since last year, he says.

Although the company says joint-venture vehicles will include medium-sized and heavy-duty trucks, the models are yet to be decided. "We don't make light trucks, but that doesn't mean we cannot help our partners," Von Meister says.

The Chinese market heavily favors cab-over-engine trucks, he says, a formula introduced by European and Japanese truck makers, which Von Meister says is appropriate to many Chinese cities with narrow roads, but which are less aerodynamic and fuel-efficient than cab-behind-engine models.

The cab-behind-engine trucks, often called long-nose trucks, are reckoned to be up to 15 percent more efficient than cab-over-engine models. The joint venture will consider bringing the long-nose, which is prevalent in developed countries, to China.

Apart from tapping the domestic market, the joint venture also shares a common mission to explore the world market.

An Jin, president of JAC, says the joint venture will explore the overseas market.

Von Meister says that when one market falls "there are other markets going up, so our business is more stable by not being too exposed to a single market".

With the prolonged downturn, China may be a better market than the US or European markets, but three years of bullish growth appear to have ended.

 

wangchao@chinadaily.com.cn