Mahindra & Mahindra (M&M) is planning to invest $33m to buy the Navistar International’s shares in order to completely acquire its subsidiaries in India.

The agreement of purchase would allow both the companies to continue the exchange of services, support and products for uninterrupted business and awaits approval, which is expected to complete by 2013.

As part of the purchase, M&M will fully own the Mahindra Navistar Automotives (MNAL) and Mahindra Navistar Engines (MNEPL) in India.

Navistar president and chief operating officer Troy Clarke said that the Indian market has not expanded as company had expected and industry challenges there continue in the near term.

"Mahindra has extensive experience and knowledge of the Indian automotive sector and they are best situated to devote the time and resources required to capitalize on future opportunities in India," Clarke added.

Navistar and Mahindra formed a joint venture, the MNAL in 2005 to manufacture trucks and buses in India, while the MNEPL joint venture was formed in 2007 and started producing engines in 2010.