Mumbai: Sports utility and tractor maker Mahindra and Mahindra has entered into a joint venture with the third largest truck manufacturer in the US Navistar International. The joint venture company, to be known as Mahindra International, will manufacture and market light, medium and heavy commercial vehicles for Indian and export markets.

Mahindra and Mahindra will have a majority 51-per cent holding in the joint The combined investments of the two companies is expected to be over $80 million over a two-to-three year period, according to a statement from the two companies.

Anand G Mahindra, vice-chairman and managing director of Mahindra and Mahindra, said, "This JV will help us strengthen our competencies across our core areas of product development, engineering and manufacturing."

"The joint venture will enable us to widen our participation in the auto sector in India, and our relationship with Navistar will also support our aspirations to be a global player," Mahindra added.

Daniel C Ustian, Navistar chairman, CEO and president, said the joint venture gives the company "The opportunity to participate in the economic growth of India and the surrounding region, working with a partner of proven capabilities and reputation." He further added, "This approach provides both inherent cost savings and the advantages of scale."

Mahindra International is expected to start production of commercial trucks and buses in 2007 in a new state of the art facility, which includes cab assembly, vehicle assembly and a paint shop. The vehicles that roll out of the facility will have 90 per cent local content due to the strong availability of quality parts and materials from Indian suppliers, the statement said.

As part of the venture, the companies have opened a development centre in India employing about 100 engineers, which the company says would be tripled very soon. The engineering process on the vehicles to be introduced in the Indian market in 2007 has already begun.

M&M has transferred its commercial vehicle business and its line of light vehicles to the joint venture, Navistar said.

The venture will use Mahindra & Mahindra''s distribution network to launch a range of medium and heavy commercial vehicles based on the Navistar unit''s existing product platforms, Navistar said. The venture also is expected to export vehicles through its own distribution channel, as well as Navistar''s and Mahindra & Mahindra''s overseas networks.