International 2007 Emissions Plans

Keith Browning · November 12, 2005

International Truck and Engine Corporation Issues Update on 2007 Emissions Plans Including Anticipated Price Increases; Validation Will Involve Largest Field Test In Company History

WARRENVILLE, Ill.--(BUSINESS WIRE)--Nov. 8, 2005--International Truck and Engine Corporation, the operating company of Navistar International Corporation (NYSE:NAV), today provided an update on its plans and progress toward development of 2007 emissions-ready trucks and engines, including its goals for product testing, its technology path and expected price increases.

Dee Kapur, president of the company's truck group, said that an industry media briefing held today was part of a plan to ensure that "our customers can make informed decisions about their business" with 2007 quickly approaching and customers already scheduling orders in the third and fourth quarters.

"International is building on its years of experience with Green Diesel Technology® vehicles to implement evolutionary changes in our products to meet 2007 standards," said Kapur. "In doing so, our goals are to provide International and IC Corporation customers with the highest reliability, serviceability and performance."

International announced as part of the briefing that it is focused on achieving comparable performance to what its customers see today and is conducting the largest field test in its history to help achieve that goal.

"Our goal for testing is to obtain robust data on all areas that affect the performance of our integrated truck and engine solution and with our engine suppliers, including power levels, fuel economy, durability, reliability, and maintenance intervals," said Phil Christman, vice president, product creation. "This involves extensive winter testing and ensuring we have trucks in customers' hands in a wide variety of applications. We will be testing performance in millions of miles."

International released preliminary information on both pricing and fuel economy, noting it was working on minimizing the impact of both on its customers. Prices for International mid-range diesel powered trucks and IC buses are estimated to increase $5,000 to $6,000 per vehicle while for International Class 8 truck/tractors with supplier engines, the estimates range from $7,000 to $10,000. Additional charges will apply with certain engines where higher horsepower requires dual after treatment.

The anticipated price increases in the cost of new trucks are the results of more stringent federal exhaust emissions standards that go into effect in 2007.

"We are supporting incentives to mitigate these price increases through our work with the American Trucking Associations (ATA)," said Patrick Charbonneau, vice president, government relations. "The ATA is engaged in discussions with a number of elected officials to give customers a five percent tax credit on Class 8 trucks containing the new engines."

Based on current tests of International engines, fuel economy degradation currently is estimated beyond the 1 percent expected through the use of ultra low sulfur fuel. Christman said International is also focused on maximizing fuel economy to close the gap.

For its family of mid-range engines, International will be optimizing exhaust gas recirculation (EGR), and using proven air management and fuel injection systems in addition to a diesel particulate filter based upon six years of Green Diesel Technology vehicle development.

International also noted it is closely collaborating with its engine suppliers, Caterpillar and Cummins, both of which will be using cooled EGR strategies, for the 2007 solutions in its Class 8 trucks.

"We are doing everything we can to support our customer's business on the product and service side, as well as to be a source of knowledge on the latest developments. It will be a collaborative effort between International and our dealer network to be a 2007 emissions expert for our customers," Kapur said.

International Truck and Engine Corporation is the operating company of Navistar International Corporation (NYSE:NAV). The company produces International® brand commercial trucks, mid-range diesel engines and IC brand school buses and is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company is also a provider of truck and diesel engine parts and service sold under the International® brand. A wholly owned subsidiary offers financing services. Additional information is available at: www.internationaldelivers.com.