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VW buys stake in Navistar and gains foothold in US truck market

Volkswagen Truck & Bus and Navistar announced that the German truck builder purchased 16.6% of the American company. This alliance not only is an opportunity for VW to get market share in the States, but also a sign that VW isn't too badly battered by the diesel scandal.

CEOs from both companies cited the various ways this $256 million deal will be beneficial. For Navistar, the company will get a healthy amount of cash, which MarketWatch points out will be helpful in light of recent declining sales. Navistar also will now have access to VW's wealth of development resources as well as greater purchasing power due to scale. VW will benefit by having a network of dealers in the US and a company with insight on how the American truck market works and what buyers in the US demand of their vehicles. Until now, VW has only been able to compete in Europe and South America with MAN, Scania, and Volkswagen Caminhões e Ônibus.

This deal also shows that, despite the massive fines and lawsuits VW has been dealing with following the diesel emissions scandal, the company will likely be just fine. Even if this alliance is pocket change compared with the company's $15 billion American settlement, companies that are on shaky financial ground don't typically spend this kind of money just to expand market share.

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