Mahindra & Mahindra has announced that the company has entered into a joint venture agreement with US-based Navistar International Corporation to manufacture diesel engines medium and heavy commercial trucks and buses in India.

Navistar International Corporation is North America’s largest combined commercial truck, school bus and mid-range diesel engine producer.

The two firms will invest USD 90 million in the new venture over the next five years.

Navistar International Corporation through its subsidiary International Truck and Engine Corporation signed a joint venture agreement with the company.

The new venture will be named ‘Mahindra International Engines (MIEL)’. M&M will hold 51% stake and Navistar will hold the balance 49%.

Mr. Anand Mahindra, MD & Vice Chairman of Mahindra Group 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, President of M&M Automotive Sector, said, “This JV marks the second significant partnership between M&M and the Navistar affiliate, following one in 2005.”

“M&M's sourcing expertise would help the JV source up to 85 per cent of engine components locally”, Mr. Goenka added.

The Production of the new company is expected to be started in 2009.

The M&M stock, closed today at Rs 757.00 on BSE, down by 1.04 % from previous close of Rs 764.95. The stock hit an intraday high of Rs.762.00 and low of Rs.730.00.