Volkswagen Buys 16.6 Percent of Heavy-Truck Manufacturer Navistar

Volkswagen continues to battle through the Dieselgate scandal, but that isn’t keeping it from making big moves. Evidence of that is the purchase of a large share of truck manufacturer Navistar.

According to Bloomberg, Volkswagen purchased a 16.6 percent stake in the company, which ran just north of $254 million ($15.72 per share for 16.2 million shares). In this deal, Volkswagen Truck & Bus—the company’s large-vehicle arm—will hold the shares for at least three years and will align the two companies' product development and procurement.

The hope for this deal is to reduce Navistar's costs by at least $200 million by year five and get the technology needed to meet tightening emission regulations. For Volkswagen, the hope is that the link with Navistar will open up the opportunity to move its heavy trucks into the U.S. and give it a source for U.S.-compliant engines.

Navistar’s struggles have been well documented since 2010—when regulators wouldn’t approve its heavy-duty diesel engine. This disapproval resulted in the company pulling its "premium vocational trucks" in the same year. Since then, the company has failed to meet U.S. standards, putting it in serious financial issues.

Luckily for Navistar, VW Truck & Bus isn’t affected by the car arm’s Dieselgate scandal, so it is at least on stable ground.

Only time will tell if these two companies pairing up will net the results they are both hoping for. Stay tuned.

On the light-vehicle side of things, Volkswagen continues to roll out strong deals to keep buyers interested in the embattled brand. One of VW's better deals is its 36-month lease on the 2016 e-Golf, which runs $179 per month after an initial payment of $2,349. In addition to this deal, there is also 0 percent financing for up to 72 months on the e-Golf, plus $1,000 in finance bonus cash.