The automobile industry is finally on the rise again mainly due to low gasoline prices. Lundberg conducted a survey recently which revealed that right now US is witnessing the lowest gas prices ever since the month of April back in 2009. This in turn has given a huge surge to the demand of automobiles specifically trucks.
Due to this reason, most leaders in the automaker industry are seeing it as a good opportunity and are making serious efforts in expanding truck portfolio. A prominent writer Bill Visnic of Forbes is of the opinion that a possible deal may emerge between General Motors Company (NYSE:GM) which is the biggest seller of cars in North America and Navistar International Corp (NYSE:NAV) which is an Illinois-based automobile company. The deal concerns “medium-duty” trucks and chances are that both companies will manufacture these trucks in collaboration with each other. The industry classification covered by these trucks will be Class 4, 5 as well as 6.
When contacted by Forbes, the General Motors Company (NYSE:GM) spokesperson declared that no announcements have been made in this regard by the company and no significant information is there to be shared on the subject.
One important fact worth sharing here is that medium-duty trucks have always been a part of GM’s production for many years but the production was abruptly stopped back in 2009. The cutback was mainly due to tough times witnessed by the company over the past few years resulting in severe recession along with bankruptcy.
If the whole deal does materialize it will be good for both parties. While on one hand further production streams will become available for Navistar as the company also plans to prepare for an International launch of its truck brand and on the other hand, it will provide General Motors with Navistar’s production procedures and techniques. It will also help GM to kick start its line of medium-duty trucks once again after a break.
Furthermore, a new opportunity will also come GM’s way to enhance its footing in to the market of automobiles which right now is mainly influenced by Ford Motor Company’s (NSYE:F) truck portfolio.
According to reports, Ford and Navistar were working together regarding medium-duty trucks but the contract ended last year as Blue Oval signed a contract with United Auto Workers union in the year 2011 which included an in-house manufacturing of trucks during the current year. F-750 as well as F-650 trucks will now be manufactured at Ford’s Cleveland plant. The joint venture of Navistar and Fords had an annual worth of $400 million.
General Motors Company (NYSE:GM) already has indulged in a partnership with a Japanese automobile company Isuzu Motors. A month ago, the automaker made a deal with Japan’s Isuzu Motors to offer their “cab-over” truck portfolios, a variant of Isuzu’s N-Series. These special kind of trucks have engines underneath the driver rather than at the back.
On Tuesday, prior to closing bell the stocks of Navistar International Corp. (NYSE:NAV) rose by 2.17% due to these partnership rumors with General Motors Company (NYSE:GM) reaching $22.63. The shares of GM also went up by 0.36% reaching $33.35 right before closing of the market.