HomeManufacturingVolkswagen Alliance, IC Bus Solutions Drive Navistar Growth

Volkswagen Alliance, IC Bus Solutions Drive Navistar Growth

The profitability continues for new-look Navistar following a 15-percent revenue increase it posted for the first quarter.

A strategic partnership with Volkswagen Truck and Bus that closed one year ago paid dividends in FY2017, as Navistar reported its first profits since 2011. The company has high expectations for this year, which were buoyed by Thursday’s announcement of $1.9 billion in sales—a nearly 12-percent increase from the same period last year. The gain was primarily driven by a 24-percent increase in Class 6-8 truck and bus sales volumes.

“We are off to a strong start in 2018, thanks to our ability to grow Navistar’s position in a strengthening market,” said company President and CEO Troy A. Clarke in a statement. “We grew our Class 8 market share and improved our margins, on the way to delivering our best first quarter on an adjusted EBITDA basis since 2011.”

Overall, Navistar reported a first-quarter net loss of $73 million, or $0.74 per share, because of debt refinancing, part of cost-cutting measures implemented over the past several years. But Adjusted EBITDA came in at $104 million, a year-over-year increase of 89 percent.

Subsidiary IC Bus is playing a large role in Navistar’s resurgence. Trish Reed, VP/GM at IC Bus, told STN in advance of Wednesday’s earnings release that investments from VW Truck and Bus have started to show dividends, by bringing to market “better and different products.” Exhibit A is development of the all-electric “chargE” school bus. A protoype was displayed at the NAPT Summit in November, and Reed said the ZEV will go on tour this spring and summer.

She added that additional chargE demo units will be released next year, with limited production of what she termed as “the first phase of electrification” that is scheduled to start in 2020.

“We’re excited to have the VW alliance and bring an OE packaged solution to the marketplace,” she said, explaining how IC Bus hopes to differentiate its electric offering from competitors. “We’re not trying to rush it. We know there’s an appetite in California. That will be the beginning of the journey.”

First and foremost, IC Bus is ramping up production next month through the summer, of its gasoline conventional school bus in response to what Reed called “diesel fatigue.” That is felt by some customers, based on increased maintenance costs and a lack of qualified mechanics. The CE Series uses the Power Solutions International 8.8L engine that also powers the propane school bus model.

Speaking of propane, IC Bus is now offering customers the choice of a 46-, 68- or 90-gallon tank, depending on wheel-base needs or route length, said Sudha Veerapaneni, Navistar’s product marketing director for IC Bus. She added that the gasoline CE offers a 60- or 100-gallon tank, while diesel configurations are 40, 65 and 100 gallons.

IC Bus also recently launched its new RE Series transit-style school bus. Veerapaneni said the new model carries over many features from its predecessor, but replaces the DT engine with the new Cummins L9 that has a direct-drive cooling to improve serviceability and allow for cold starts. She explained that the feature allows the gear box to run at engine RPM only when the fan is engaged. It also features an updated body controller for the electrical system.

The RE Series also provides similar features as the CE Series, such as a rollout battery tray and DEF tank access, to ease maintenance operations.

Reed also pointed out that Navistar’s remote diagnostic and vehicle telematics suite OnCommand Link is now standard on all IC Bus models, to increase vehicle uptime and reduce maintenance costs by providing real-time health reports. And the Full View Camera developed with Rosco Vision Systems and released earlier this year, is available on both the CE and RE. Veerapaneni said this is indicative of the company’s “Driver First” initiative, with development coming directly from a survey of over 1,500 school bus drivers.

The goal of providing remote camera views around the school bus that place displays in the in-cab rearview mirror, depending on the gear selected, is to not overload drivers with too much information, she added.

“The challenge is assisting them and not distracting them,” she said. “We really took the time with Rosco to develop something that was best for school bus drivers, rather than just adopt an automotive solution.”

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