Dana Holding is to become a full service provider of driveline systems in the growing South American commercial vehicle business after completing a strategic transaction with Sifco, a leading producer of steer axles and forged components in South America.

The agreement enables Dana to add truck and bus steer axles to its product offering in South America and effectively positions the company as the leading full-line supplier of commercial vehicle drivelines – including front and rear axles, drive shafts, and suspension components.

“The transaction is consistent with Dana’s emerging market strategy and addresses strong customer demand for a complete driveline product offering in the region,” i said in a statement. “Together with the recent investment announcement in China for its DDAC joint venture, this next step in its strategy implementation further reinforces Dana’s total commitment to support customers in the global truck market.”

Under the agreement, Dana acquired the distribution rights of commercial vehicle steer axle systems and is now responsible for all customer relationships, including marketing, sales, engineering, and assembly. Key customers in the Brazilian commercial vehicle market include Agrale, Ford, Iveco, MAN, Mercedes Benz, Scania, and Volvo.

Dana obtained an exclusive, long-term supply agreement with Sifco to ensure supply of key components in the systems – I-beams, steer arms, and knuckles. In addition, Sifco will help Dana establish, in the near term, assembly capabilities for these systems.

Dana’s investment of US$150m to acquire the rights to the business is expected to generate $350m in annual revenue, taking total annual revenue in South America to over $1bn. Total units sales of commercial vehicles in Brazil totaled 248,000 in 2010.

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