The $5.6 billion US-based International Truck and Engine Corporation is planning a foray into the fast-growing domestic commercial vehicle market.

Sources familiar with the developments told Business Standard that a high-level delegation of the heavy duty truck, bus and engine maker was in India recently to explore setting up of a manufacturing facility or a joint venture with a local company. The delegation also studied the domestic auto component industry, the sources said.

The delegation comprised D T Kapur, president truck group, Thomas M Hough, vice president (strategic initiatives), Steven Hyde, director original equipment business, Somu R Sundaram, vice president business development and managing director Asia Pacific and John P Lamoureux, vice president, truck strategy and business operations.

When contacted, a senior executive said the company was seriously interested in starting operations in India and the latest visit was part of an ongoing exercise. He said an announcement could be expected in the next two months, but did not give details.

According to the sources, this was the third visit by the official of the International Truck and Engine Corporation, a subsidiary of the $7 billion Navistar International Corporation, to India.

Based in Ilionis, the company produces heavy-duty trucks under the International brand name. These range from emergency vehicles to trash trucks. It also makes 160-300 hp engines and buses. Its holding company, Navistar, has production facilities in Argentina, Brazil, Canada, Mexico and the US.

According to an analyst with an international broking house, it would require about $1 billion for any new truck company to set up a greenfield facility in the country.

The analyst said it would make sense for any international truck maker to foray into the Indian market due to the current surge in truck sales and the growing preference for multi-axle vehicles and tractor-trailers.

The growth has been primarily attributed to the various ongoing highway and road development projects and the recognition by fleet operators of the improved operating economics of multi-axle vehicles.

Sale of trucks and buses in the country jumped by 36.5 per cent during 2003-04 to 260,345 units.

This was helped by a 43 per cent rise in sale of medium and heavy-duty trucks at 136,771 units.

Volvo and Tatra Trucks are the only two global firms operating in India. DaimlerChrysler has also started tests for its highest-selling Actros range of heavy trucks, which it plans to import as completely-built units.

Even though sale of heavier trucks have improved, analysts said that 98 per cent of the trucks sold are still powered by less than 200hp engines.

Sensing the growing trend towards higher hp engines, market leader Tata Motors has recently acquired South Korea's Daewoo Commercial Vehicle to make over 250 hp trucks.

Ashok Leyland, the second biggest manufacturer in the domestic market, has also entered into alliances with global firms to manufacture 210 and 260 hp trucks.