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SATISFYING READINESS REQUIREMENTS WITH REDUCED RESOURCES

2011 DoD Maintenance Symposium

Regis Luther – Vice President

November 15, 2011

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Navistar History

1831: Cyrus McCormick invents mechanical reaper

1900s: International Harvester Company founded

1910s: School buses added to product line

1930s: First engine plant opens

1940s: Military vehicle production for war effort

1950s: IH enters off-highway truck business

1980s: Aerodynamics is the new buzz

1990s: Emphasis on visibility, comfort, efficiency

2000s: Hybrid vehicles, Navistar Defense (2004), ProStar/LoneStar

(FY2010 Revenue: $12.1B)

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Medium: 40% Severe Service: 34% Heavy: 17% School Bus: 48%

North American Market Share Leader: 2011 YTD

Combined Class 8 Market Share (Q3-2011): 21%

School Bus/Combined Class 6-8 Market Share

FY-2009 27%

FY-2010 35%

YTD-2011 27%

Navistar Today: North America Focus, Global Growth

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Award-Winning Service

2010 J.D. Power & Associates Award Winner Highest Customer Satisfaction

Heavy-Duty Dealer Service

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2007 Core Products 2011 Global Product Portfolio

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“1+2+3” Product Strategy

MxF 7

MxF DT

MxF 11/13/15

Common Cab Over Common Aero Cab (NGV)

Common Global Chassis

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3

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Typical Truck Total Operating Cost Breakdown

Initial Price

Fuel Efficiency

Weight • Payload • Productivity

Maintenance • Parts • Service

Uptime, Reliability, Durability

Driver Satisfaction

Residual Value

Administrative: Payments, Insurance,

Licenses, etc.

20%

30% Fuel, Oil, etc.

10%

40% Wages, Benefits

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Maintenance: Mileage Based Oil Intervals

Maintenance Interval Future Target = 100,000 miles

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Navistar’s & industry’s goal:

Have the next engine oil category ready for first licensing in early 2016.

Short-term goal: Set PC-11 Parameters (CJ-4 to CK-4) by end of 2011.

The main objective of PC-11 is fuel economy with other performance considerations:

Fuel economy is correlated with High Temperature High Shear (HTHS)* oil viscosity.

Heavy Duty engine oils today must have a minimum of 3.5 HTHS

Engine design can be optimized for <3.5 HTHS to give equivalent engine life.

Conclusion: The industry will look to lower HTHS engine oils to maximize fuel economy and reduce Green House Gas emissions.

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Next Heavy Duty Engine Oil Category:

Proposed Category (PC)-11

Note: TBN (Total Base Number) & TAN (Total Acid Number) are measures of neutralization capacity and acidic components in the oils, and used to assess oil drain intervals. *HTHS is an evaluation method that tests oil viscosity at the shear rate & temperature representative of those in the bearings of automotive engines in severe service.

Oil Viscosity Fuel Economy Improvement over 15W-40 (~4.2 HTHS)

5W-30 (3.5 HTHS) ~ 2%

PC-11 (2.9 HTHS) ~4%

Turbo Deposits Control

Biodiesel Compatibility

Emulsion Stability

Use of Engine Oil for Hydraulic Fluid

Oxidation Control

TBN depletion and TAN increase (improved test reliability)

Shear Stability

Aeration Control

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Conclusion

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Maintenance is one important component of the total truck operating costs.

Navistar’s “1+2+3” strategy for commonality minimizes maintenance & service costs.

Navistar continues to invest in innovation that helps our customers save money.

Collaboration with the DoD is critical to accelerate new technology development.