International Australian market plan revealed

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Motoring Australia / May 26, 2015

Navistar executives have outlined their basic strategy to re-introduce International to Australia.

At a press conference at the recent Brisbane Truck Show, Navistar Inc Vice President and General Manager – Global, Tom Clevinger, along with Navistar Auspac Managing Director, Tim Quinlan, Navistar Auspac Director of Sales, Marketing and Business Development, Glen Sharman, and Navistar Auspac Chief Engineer, Adrian Wright, revealed the rough timeline guiding International's return.

They also shone a light on International's initial product offering and gave an insight into how the brand will sit alongside Navistar Auspac's existing Cat Trucks operation.

CHANGING FORTUNES

Navistar has endured tumultuous times on both sides of the Pacific over the past five or so years. Here the creation of the NC2 joint venture between Navistar and Caterpillar in 2010 saw Cat's C15 engine slotted into the new Cat Trucks line-up as the heavy-machinery giant simultaneously (and controversially) pulled out of on-highway engine supply elsewhere.

Local assembly of Cat Trucks followed, only for production to be shifted back to the US as the joint venture dissolved, with Navistar assuming full control of the operation in 2011.

Navistar Inc, meanwhile, had its own struggles to contend with, but a concerted push to reduce costs, divest itself of non-core businesses, transition from EGR to SCR emissions technology and generally streamline operations has, from 2012, returned the company to a stable financial footing.

There's been a lot happening within the extended Navistar Inc family, that's for sure, but the firm has moved exceptionally quickly since the initial decision was made in early 2014 to return International to Australia.

It's been a long time coming for a brand with a rich history in this part of the world. After falling on hard times, the Australian operations of parent company International Harvester were purchased by Iveco in 1992, although Iveco continued to sell some International-branded trucks under licence.

Through its agricultural equipment International can in fact trace its history back to the 1850s here in Australia and to 1831 in the US, when Cyrus McCormick produced his innovative reaping machine and founded the McCormick Harvesting Machine Co.

That was one of five companies that amalgamated in 1902 to form International Harvester, which produced a wide variety of equipment, including trucks, until 1986. Here in Australia the firm's truck operations shifted into top gear with the establishment of a major production facility in Dandenong, Victoria, in 1952 – a plant still in operating under the Iveco banner today.

It was this plant that produced the ACCO, AB Series and S-Line families of trucks, among many others; vehicles that forged a strong reputation for reliability and strength through years of punishment on rough Aussie roads.

Now, some 23 years after International's exit from Australia, the brand is set to roll our roads once more – and owner Navistar Inc and local arm Navistar Auspac are keen to capitalise on the iconic name's heritage.

PROSTAR SPEARHEAD

International's return will be spearheaded by the ProStar 112. While the Cat Trucks range also adopts the same basic ProStar format, in a major point of difference the International ProStar will be powered by the Cummins ISXe5 15-litre engine, in a product also tailored for Australian conditions.

According to Navistar Auspac Chief Engineer, Adrian Wright, the local-spec ProStar represents the world's first installation of the 15-litre ISX in a short-hood ProStar format.

"The ProStar is the first model we're going to introduce on the International side of the business; it's a key model for us – it's where the market volume is and it's also a key model in the US," he said.

"The Australian model will be based on the American model; we'll leverage as much of that technology as we can. At the end of the day we want to combine the aerodynamics of that North American truck with the ISXe5 engine, which meets our emissions here in Australia and gives us a good, simple and efficient package."

In bringing the ProStar to Australia, Navistar Auspac worked in partnership with Cummins South Pacific, with assistance also received from Navistar Inc and Cummins headquarters in the US.

Extensive work has been undertaken to ensure the engine meets not only our ADR requirements and Navistar's own standards, but also Cummins' Installation Quality Assessment (IQA) criteria.

Changes were made to the engine mountings, the air intake system, the radiator and charge air cooler, the AdBlue tank and DEF doser and lines, and the exhaust and aftertreatment system, among many other components.

While the US ProStar is fitted with ISX EPA engine, Wright said there was little to be gained by bringing that same engine here.

"It [the US-spec engine] is a 'hamburger with the lot', if you like, with all the acronyms," he said.

"We don't need all that yet in Australia, along with its extra cost and complexity for operators."

Mr Wright said he has complete confidence the engine will meet local operators' needs, and that it has ample cooling capacity to handle local conditions.

"We've got better than 50-degree cooling capability on this truck," he said.

"In theory this means you can operate the truck at full load indefinitely on a 50-degree day without the engine de-rating."

In local spec the ProStar boasts a bumper-to-back-of-cab (BBC) measurement of 112 inches (2845mm), making it suitable for 34-pallet B-double applications, while it has a fuel capacity of over 1000 litres.

It comes with LED headlamps with Daytime Running Lights (DRLs) and its cab is crash-tested to ECE R29 standards.

Here it will be offered in Day Cab, Extended Cab and 40-inch integrated Sleeper variants, the latter also optimised for 34-pallet work.

Future options could potentially include the addition of a 13-litre engine (both Navistar's N13 and/or Cummins' new ISGe5), a 122-inch long-hood version and a 56-inch integrated sleeper.

LOCAL RELEASE

So, when will we see the International ProStar here in Australia? Navistar Auspac says the US engineering release of the Aussie-spec ProStar will be made in July 2015, with pilot builds to commence in October 2015 and full production to commence in February 2016.

At this stage local availability is slated for early 2016.

Navistar Auspac Managing Director, Tim Quinlan, said the company is now laying the groundwork for Australia's International dealer network.

"We're currently in the process of developing that strategy," he said.

"Out of courtesy and respect for the Cat dealers we've offered the International brand to them. They're at various stages of deciding; some have opted not to take on the International brand, there are still a couple who are considering it, and we will then be entertaining the prospect of other truck dealers around the country.

"We'll probably have, and [at this early stage] I'm guessing, a diverse dealer network."

FELINE FUTURE

The re-introduction of International has been viewed by some as a potential threat to the future of Cat Trucks, especially given the inability of Cat's C15 engine to meet Euro 6 emissions standards – not that there's any sign those standards look likely to be mandated here before 2020.

Mr Quinlan, however, gave his assurance that the future of Cat Trucks is secure…

"Cat dealerships are going to stay in place; they're going to continue to sell the Cat trucks that we have, that we've developed, while one or two of them might [also] take on the International brand," he said.

"For us, we want to get market share in the heavy-duty sector. So if we sell Cat trucks, if we sell International trucks, that's good for us."

Mr Sharman echoed those sentiments.

"[international] now gives us more scope to service customers' needs," he said.

"Cat certainly has a viable future for us. We see Cat continuing on; we've got dealers who are committed to it."

Those comments were underlined by the launch of Cat's new CT630HD at the Brisbane Truck Show, the new model expanding the Cat line-up's capabilities to include road train applications with GCMs of up to 131 tonnes.

Mr Wright said there was plenty of life left in Cat's C15 for the immediate future.

"The Cat engine is good until 2020 as far as we're concerned and it's performing well," he said.

"Trying to predict more than five years ahead, I don't know."

Mr Sharman was also quick to quash any notions of engine swaps across the two brands.

"The International product will have a Cummins engine and potentially a Navistar engine, and the Cat product will continue with the CT13 engine, which is a Navistar product, and the Cat C15 engine – there will be no other options," he said.

FURTHER EXPANSION

As for International's future expansion, Navistar Auspac said the ProStar would likely be followed in two to three years by the WorkStar.

"We’ve got a high-level strategy but there's no timing on it yet," said Mr Wright.

"Our plan is to grow the model range incrementally over the next five years."

To that end, Navistar Auspac said it's also examining long-hood LoneStar – which in highly customised 'Blade' form was drawing plenty of interest at the Brisbane Truck Show.

"The LoneStar is a bit of a barometer test at the moment," said Mr Sharman, who admits it could work for bulk-haul applications.

Navistar Auspac said it will leverage significant synergies in having the two ProStar-based ranges under two different brands in Australia.

"We get really good economies of scale out of this and the two brands will actually support each other from a technical and volume point of view," said Mr Wright.

"There will be certain niches where the Cat product will fit better and certain niches where the International product will fit better."

Amidst all the industrious activity to re-establish the International name in Australia, Mr Clevinger said Navistar's motivation remains fundamentally simple.

"We wanted to have control of our own brand; Cat's not our own brand," he said.

"We have a great relationship with Cat and we work with them, but at the end of the day we'd like to be able to have control of our own brand in some of these markets."

Mr Sharman, meanwhile, says the addition of International is a thrilling prospect for Navistar Auspac and Navistar Inc.

"It starts now for us," he said.

"Having International and really getting the runs on the board come 2016, and working with the Cat dealers and working with the Cat product, we're really lucky in Australia and New Zealand to have these two good brands to work with."