A unit of Navistar International Corp (NAV.N) and China's Jianghuai Automobile (600418.SS) plan to set up a 50-50 truck venture with investment of at least 2 billion yuan ($293 million), Jianghuai said on Tuesday.
Under a framework agreement, Jianghuai and NC2 Global LLC will set up a joint venture to produce and sell heavy trucks and accessories.
The venture will also cooperate with NC2, Navistar and Caterpillar (CAT.N) on product research and development.
Sources familiar with the situation told Reuters last month that Caterpillar (CAT.N) and Navistar were in talks on cooperation with Jianghuai, as foreign players move to tap a market dominated by Chinese state-owned auto groups.
Heavy truck sales in China rose 11.75 percent to 541,256 units in 2008, more than double the level in 2003, according to Nomura Securities.
Sales are set to rise in coming years, bolstered by Beijing's efforts to improve the country's infrastructure, analysts say. (Reporting by Alfred Cang and Edmund Klamann)