BEIJING - US truck and engine manufacturer Navistar Inc is about to finalize joint venture agreements with Chinese automaker Jianghuai Automobile Co Ltd (JAC) as it moves to haul in a share of the world's largest commercial vehicle market.

Navistar signed the joint venture agreement with JAC last September to make diesel engines in China. At the same time, its joint venture with Caterpillar - known as NC2 - agreed to form a partnership with JAC to develop and build commercial vehicles.

The company said at a recent press conference in Beijing that the projects are expected to soon receive government approval.

Navistar plans to build its Maxxforce diesel engines in China, which will be first used in JAC's light commercial vehicles, the company said.

The company said it won't duplicate the trucks it makes in the US. Instead both partners will work to co-develop products that meet the requirements of China's market.

The company didn't disclose what model the future joint venture plans to make, but said extensive market research is underway by Navistar and JAC to help formulate a product plan.

"We anticipate that in 60 days, the market study will allow us with JAC to jointly develop a product program on the truck side of the business," said Troy Clarke, president of Navistar Asia Pacific.

"It will influence the revision of the current JAC product line and the introduction of Navistar's International-badge products in some segments.

"With great humility, we seek to learn the Chinese market, and we seek to transfer technology that we think can benefit not only the commercial vehicle sector, but the country as well," he said.

The company is well known for its aerodynamic trucks that improve fuel efficiency.

China's commercial vehicle sales in May dropped 17 percent from April. The first-five-month tally decreased 2 percent from a year earlier, according to market data.

Navistar CEO Daniel Ustian said the company is aware of current downturn, which is partly a result of overheated buying last year.

He noted that Navistar is planning for the long term.

"We are still very bullish, very optimistic about the future of the truck industry in China," Ustian said.

The company also announced at the briefing that Rudi von Meister was appointed president of its China operations.

Meister speaks good Chinese and has worked in the country since 1985 for General Motors, Delphi, and most recently, at Fiat's commercial vehicle unit Iveco.

"Many similarities exist between the US and Chinese geographies and road system," Meister said, convinced that the Navistar can use its expertise to support development of China's long-haul transport.

Though Navistar is the first truck company from North America to a form joint venture in China, European truck makers Volvo and Daimler have been in the market for quite some time without satisfactory results.

Analysts say it is hard for foreign truck companies to achieve success by locally making and selling their own-brand products as carmakers have because commercial vehicles buyers are much more reluctant to pay a brand premium.

China's truck market is huge, so latecomers like Navistar still have opportunities, said Zeng Zhiling, director of JD Power Asia Pacific Forecasting.

Half of heavy trucks worldwide are now sold in China, but homegrown brands have more than 95 percent of the market, he said.

The crucial question is whether Navistar can offer products that suit the market, he said.

China Daily