Ford turns Navistar from truck business customer to rival

Mon, 19 May 2014

There is a showdown brewing in the medium-duty truck segment next year as Ford prepares to launch its all-new, in-house engineered 2016 F-650 and F-750. It finally marks the end of the Blue Diamond joint venture between Ford and Navistar and, making the two entities direct competitors instead of partners.

Ford announced the end of the joint venture in an investor report in 2011, but it didn't reveal the new F-650 and F-750 until the NTEA Work Truck Show in Indianapolis, IN, in March. Unlike the current, Mexican-built models, the new generation will be built in Avon Lake, OH, starting in mid-2015.

The challenge from Ford comes during a rough patch for Navistar. The company had a $248 million loss in the first quarter, according to The Wall Street Journal, and its medium-duty truck market share is currently down to 26 percent, from 36 percent in 2011. Building the previous-generation Fords brought in about $400 million a year to Navistar, according to the WSJ. To take on its former partner, Navistar plans to offer its International brand of medium-duty vehicles with more engine and transmission options to customers. It even struck a deal with Cummins to put its diesels in some of the models.

Ford isn't wasting time telling potential customers about its 2016 trucks. It already launched a a webpage advertising them as "Built by Ford Here in America." Orders open in October, but pricing hasn't yet been announced.

"Customers are excited about what we're doing with the new trucks," said Ford spokesperson Mike Levine. The company sees their advantage as offering the brand's reputation with trucks to the medium-duty market. They are using Ford components for the engines, transmissions and much of the interior trim, which is expected to keep costs down, according to the WSJ. The F-650 and F-750 are also available with a gasoline-fueled engine with what is expected to be a lower base price. "This is a built Ford tough product," said Levine. It doesn't look like either side is hesitating from the coming fight.

By Chris Bruce