Mumbai: Mahindra & Mahindra (M&M) has signed up a joint venture deal with US-based Navistar International Corp to produce diesel engines for medium and heavy commercial trucks and buses in India.

The commercial vehicles maker, M&M would invest around $90 million over the next five years

In the new joint venture, called ‘Mahindra International Engines Ltd (MIEL)’, Mahindra will hold the major stake of 51%, whereas Navistar hold the remaining 49%.

Anand Mahindra, Mahindra Group Vice Chairman and Managing Director said, “Our plant in India will produce world-class engine models for both the Indian and global export markets. The JV will not only extend our existing partnership with Navistar but the resulting synergies will also see MIEL emerge as a force to reckon with in the global OEM market.”

Pawan Goenka, M&M President Automotive Sector said this is M&M’s second JV deal with Navistar. Initially, the two formed JV in 2005 to build light, medium and heavy commercial vehicles for India and export markets.

The diesel engines produced under new venture will power the complete line of trucks and buses produced by the former JV beginning 2009.

In a declaration, M&M said that the components will mostly be sourced locally, which would reach 85% within two years.