UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

            X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended April 30, 2001

                                       OR

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to
                                    ---- ----
                                   ----------
                         Commission File Number 1-4146-1
                                   ----------

                         NAVISTAR FINANCIAL CORPORATION
              ----------------------------------------------------
             (Exact name of Registrant as specified in its charter)

            Delaware                                36-2472404
  -------------------------------      --------------------------------------
 (State or other jurisdiction of       (I.R.S.   Employer Identification No.)
  incorporation or organization)


 2850 West Golf Road Rolling Meadows, Illinois             60008
 ---------------------------------------------          -----------
   (Address of principal executive offices)              (Zip Code)

 Registrant's telephone number including area code 847-734-4000

  Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
  1934 during the preceding 12 months and (2) has been subject to such filing
  requirements for the past 90 days. Yes X No

                       APPLICABLE ONLY TO ISSUERS INVOLVED
                        IN BANKRUPTCY PROCEEDINGS DURING
                            THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12, 13 or 15 (d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes No


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

  As of May 31, 2001, the number of shares outstanding of the registrant's
common stock was 1,600,000.

  THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF INTERNATIONAL TRUCK AND ENGINE
  CORPORATION AND MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a)
  AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
  DISCLOSURE FORMAT.


<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                      INDEX



                                                                            Page

PART I.     FINANCIAL INFORMATION

   Item 1.  Financial Statements:

            Statements of Consolidated Income and Retained Earnings --
            Three Months and Six Months Ended April 30, 2001 and 2000......  2

            Statements of Consolidated Financial Condition --
            April 30, 2001; October 31, 2000; and April 30, 2000...........  3

            Statements of Consolidated Cash Flow --
            Six Months Ended April 30, 2001 and 2000.......................  4

            Notes to Consolidated Financial Statements.....................  5

   Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations............................ 12


PART II.    OTHER INFORMATION

   Item 6.  Exhibits and Reports on Form 8-K............................... 16

Signature   ............................................................... 16


<PAGE>


                         PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements

<TABLE>
                             NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
                  STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS (Unaudited)
                                        (Millions of dollars)


                                                     Three Months Ended              Six Months Ended
                                                           April 30                      April 30
                                                           --------                      --------
<S>                                                   <C>         <C>                  <C>       <C>
                                                      2001        2000                 2001      2000
                                                      ----        ----                 ----      ----
   Revenue
       Retail note financing.....................   $ 27.0      $ 15.2               $ 48.7    $ 31.6
       Lease financing...........................     24.3        22.6                 50.1      44.8
       Wholesale notes...........................     11.9        16.6                 25.1      35.6
       Accounts..................................      6.6        12.1                 15.3      23.4
       Servicing fee income......................      8.1         7.7                 16.3      14.5
       Marketable securities.....................      5.6         0.4                 13.3       0.9
                                                    -------     -------              -------   ------
              Total..............................     83.5        74.6                168.8     150.8
                                                    ------      ------               ------    ------

   Expense
       Cost of borrowing:
           Interest expense......................     24.8        23.0                 54.8      47.0
           Other.................................      2.8         1.4                  4.5       2.9
                                                    ------      ------               -------   ------
              Total..............................     27.6        24.4                 59.3      49.9
                                                    -------     -------              -------   ------

       Credit, collection and administrative.....     12.4        11.7                 23.3      22.6
       Provision for losses on receivables.......      7.6         2.3                 14.1       3.7
       Depreciation expense and other............     14.9        13.1                 30.3      26.0
                                                    ------      ------               ------    ------
              Total..............................     62.5        51.5                127.0     102.2
                                                    ------      ------               ------    ------

   Income Before Taxes...........................     21.0        23.1                 41.8      48.6

   Taxes on Income...............................      8.2         9.0                 16.2      18.5
                                                    ------      ------               -------   ------

   Income from Continuing Operations.............     12.8        14.1                 25.6      30.1

   Income from Discontinued Operations,
        (net of tax of $0.0 and $(0.7) ).........      -           0.1                  -         1.3

   Net Income....................................     12.8        14.2                 25.6      31.4

   Retained Earnings

       Beginning of period.......................    147.7       121.4                134.9      111.2

       Dividends paid............................    (26.0)       (6.0)               (26.0)     (13.0)
                                                    ------      ------               ------     ------

       End of period.............................   $134.5      $129.6               $134.5     $129.6
                                                    ======      ======               ======     ======

</TABLE>

   See Notes to Consolidated Financial Statements.


<PAGE>



<TABLE>

                                    NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
                              STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION (Unaudited)
                              ----------------------------------------------------------
                                                (Millions of dollars)

<S>                                                         <C>                   <C>                 <C>
                                                      April 30            October 31            April 30
                                                        2001                 2000                 2000
                                                  -----------------    -----------------    -----------------
   ASSETS

   Cash and Cash Equivalents                           $   46.1             $   41.6             $   30.0

   Finance Receivables
       Retail note financing....................          219.8              1,050.5                342.6
       Lease financing..........................          221.9                223.7                205.5
       Wholesale notes..........................           88.7                 82.3                299.9
       Accounts.................................          161.1                322.5                503.9
                                                       --------             --------             --------
                                                          691.5              1,679.0              1,351.9
       Allowance for losses.....................           (8.8)               (12.9)                (9.4)
                                                       --------             --------             --------
           Finance Receivables, Net.............          682.7              1,666.1              1,342.5

   Amounts Due from Sales of Receivables........          391.2                316.5                336.4
   Net Investment in Operating Leases...........          292.1                291.1                268.1
   Repossessions................................           65.0                 42.4                 41.5
   Restricted Marketable Securities.............          509.0                 85.2                 13.8
   Other Assets.................................           28.8                 27.2                 23.5
   Net Assets of Discontinued Operations........           48.8                 48.8                 60.4
                                                       --------              -------             --------
   Total Assets.................................       $2,063.7             $2,518.9             $2,116.2
                                                       ========             ========             ========

   LIABILITIES AND SHAREOWNER'S EQUITY

   Net Accounts Payable to Affiliates...........           12.8                266.4                249.7
   Other Liabilities............................           61.7                 50.0                 47.7
   Senior and Subordinated Debt.................        1,662.9              1,874.0              1,497.4
   Dealers' Reserves............................           22.3                 24.1                 23.2

   Shareowner's Equity
       Capital stock (Par value $1.00,
           1,600,000 shares issued and
           outstanding) and paid-in capital.....          171.0                171.0                171.0
       Retained earnings........................          134.5                134.9                129.6
   Accumulated other comprehensive loss.........           (1.5)                (1.5)                (2.4)
                                                       --------             --------             --------
           Total................................          304.0                304.4                298.2
                                                       --------             --------             --------
   Total Liabilities and Shareowner's Equity           $2,063.7             $2,518.9             $2,116.2
                                                       ========             ========             ========
</TABLE>



    See Notes to Consolidated Financial Statements.


<PAGE>


<TABLE>
                          NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
                         STATEMENTS OF CONSOLIDATED CASH FLOW (Unaudited)
                         ------------------------------------------------
                                      (Millions of dollars)
                                                                           Six Months Ended
                                                                               April 30
                                                                   ---------------------------------
<S>                                                                    <C>                <C>
                                                                       2001               2000
                                                                   --------------     --------------
   Cash Flow From Continuing Operations
       Net income................................................  $  25.6            $  30.1
       Adjustments to reconcile net income to cash
           used by operations:
           Gains on sales of receivables.........................    (18.0)              (2.5)
           Depreciation and amortization.........................     31.3               27.0
           Provision for losses on receivables...................     14.1                3.7
           Decrease in net accounts payable to affiliates........   (253.6)            (457.9)
           Other.................................................      1.5               (2.3)
                                                                   -------            -------
              Total..............................................   (199.1)            (401.9)
                                                                   -------            -------

   Cash Flow From Investing Activities
       Proceeds from sold retail notes...........................  1,138.0              960.0
       Purchase of retail notes and lease receivables............   (429.3)            (579.8)
       Principal collections on retail notes and
           lease receivables.....................................     18.1               40.9
       Net (decrease)increase in revolving wholesale
          note trust.............................................    (27.0)             300.0
       Acquisitions under (over) cash collections of
           wholesale notes and accounts receivable...............     94.4             (115.0)
       Proceeds from sold retail accounts receivable.............     95.9                  -
       Purchase of equipment leased to others....................    (64.3)             (38.5)
       Sale of equipment leased to others........................     34.7               11.5
                                                                   -------            -------
           Total.................................................    860.5              579.1
                                                                   -------            -------

   Cash Flow From Financing Activities
       Net decrease in short term borrowings.....................        -              (34.5)
       Net (decrease)increase in bank revolving credit
           facility usage........................................   (225.0)              55.0
       Net decrease in revolving retail warehouse facility.......   (423.8)                 -
       Net decrease in asset-backed commercial paper
           facility usage........................................        -             (229.8)
       Proceeds from long-term debt..............................     77.7               76.3
       Principal payments of long-term debt......................    (60.5)             (39.7)
       Dividends paid to International...........................    (26.0)             (13.0)
                                                                   -------            -------
           Total.................................................   (657.6)            (185.7)
                                                                   -------            --------

   Increase (decrease) in Cash and Cash Equivalents from
      Continuing Operations......................................      3.8               (8.5)
   Net Cash from Discontinued Operations.........................      0.7               (0.1)
   Cash and Cash Equivalents at Beginning of Period                   41.6               38.6
                                                                   -------            -------
   Cash and Cash Equivalents at End of Period                      $  46.1            $  30.0
                                                                   =======            =======

   Supplemental disclosure of cash flow information
       Interest paid.............................................  $  57.5            $  49.0
                                                                   =======            =======
       Income taxes paid.........................................  $   4.5            $  20.4
                                                                   =======            =======
</TABLE>


    See Notes to Consolidated Financial Statements.



<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The  consolidated  financial  statements  include the  accounts of Navistar
     Financial   Corporation   ("NFC")   and   its   wholly-owned   subsidiaries
     ("Corporation").     International    Truck    and    Engine    Corporation
     ("International"),   which  is  wholly-owned   by  Navistar   International
     Corporation ("Navistar"), is the parent company of the Corporation.

     The  accompanying  unaudited  financial  statements  have been  prepared in
     accordance with accounting  policies  described in the  Corporation's  2000
     Annual  Report on Form  10-K and  should  be read in  conjunction  with the
     disclosures therein.

     In the opinion of management,  these interim financial  statements  reflect
     all  adjustments,  consisting of normal  recurring  accruals,  necessary to
     present fairly the results of operations, financial condition and cash flow
     for the interim  periods  presented.  Interim  results are not  necessarily
     indicative  of  results to be  expected  for the full  year.  Certain  2000
     amounts have been reclassified to conform with the presentation used in the
     2001 financial statements.


2.   On  November  1, 2000,  the  Corporation  adopted  Statement  of  Financial
     Accounting  Standards No. 133  "Accounting  for Derivative  Instruments and
     Hedging   Activities,"  as  amended  (SFAS  133).  In  November  2000,  the
     cumulative transition adjustment recorded upon adoption was not material.

     The  Corporation  uses  derivative  financial  instruments  as  part of its
     overall interest rate risk management  strategy as further  described under
     Footnote 13 of the 2000 Annual Report on Form 10-K.

     The  Corporation  is exposed to interest  rate risk  relating to changes in
     market interest rates. As part of its overall  strategy to manage the level
     of exposure to the risk of interest rates adversely  affecting net interest
     income or expense,  the  Corporation  uses interest  rate swap  agreements,
     interest  rate caps,  and  forward  contracts.  The  Corporation  also uses
     derivative  instruments on occasion to make possible  financing  under sold
     note  arrangements  with third parties in  asset-backed  transactions.  The
     Corporation's policy prohibits the use of derivative financial  instruments
     for speculative purposes.

     On the date the Corporation enters into a derivative  contract,  management
     designates the derivative as either a hedging or a non-hedging  instrument.
     Additionally,   management   distinguishes   between  fair  value   hedging
     instruments,   cash  flow  hedging   instruments,   and  other   derivative
     instruments.


<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


     The   Corporation   documents  and  accounts  for  derivative  and  hedging
     activities in accordance with the provisions of SFAS 133. In general,  SFAS
     133  requires  that an  entity  recognize  all  derivatives  as  assets  or
     liabilities  in the  statement of financial  condition  and measure them at
     fair value.  When certain  criteria are met, it also  provides for matching
     the timing of gain or loss recognition on the derivative hedging instrument
     with the  recognition of (a) changes in the fair value or cash flows of the
     hedged  asset  or  liability  attributable  to the  hedged  risk or (b) the
     earnings effect of the hedged forecasted  transaction.  Changes in the fair
     value of derivatives which are not designated as or which do not qualify as
     hedges for accounting purposes are reported in earnings.

     As of April 30, 2001, the Corporation has two interest rate swap agreements
     and three interest rate caps outstanding.  These instruments are classified
     as non-hedging derivative  instruments.  The fair value of these derivative
     instruments  as of April 30, 2001 are recorded in Other  Liabilities in the
     Statement of Consolidated Financial Condition and the changes in fair value
     for the  quarter  and six months  then ended were  recorded  in retail note
     revenue and were not material.


3.   On  November  30,  2000,  the  Corporation's  Board of  Directors  approved
     management's  plan  for  the  sale  of  Harco  National  Insurance  Company
     ("Harco"), a wholly-owned insurance subsidiary. The Harco insurance segment
     is accounted for as a discontinued operation,  and accordingly,  amounts in
     the  consolidated  financial  statements  and notes thereto for all periods
     shown have been restated to reflect discontinued operations accounting.


4.   On April 1, 2001 the Corporation adopted Statement of Financial  Accounting
     Standards  No. 140  "Accounting  for  Transfers  and Servicing of Financial
     Assets and Extinguishments of Liabilities".  The adoption of this statement
     has  not  had  and  is  not  expected  to  have a  material  effect  on the
     Corporation's  results of  operations,  financial  condition or cash flows.
     Certain   disclosures   have  been  included   below  to  comply  with  the
     requirements of this new statement.

<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


     The  Corporation   securitizes  and  sells  receivables   through  Navistar
     Financial Retail  Receivables  Corporation  ("NFRRC"),  Navistar  Financial
     Securities Corporation ("NFSC"), Truck Retail Accounts Corporation ("TRAC")
     and Truck Engine Receivables Financing Corporation ("TERFCO"),  all special
     purpose,  wholly-owned  subsidiaries of the Corporation.  NFRRC, NFSC, TRAC
     and TERFCO have limited  recourse on the sold  receivables and their assets
     are available to satisfy the claims of their creditors prior to such assets
     becoming  available for their own uses or to the  Corporation or affiliated
     companies.  The terms of receivable sales generally require the Corporation
     to  maintain   cash  reserves  with  the  trusts  and  conduits  as  credit
     enhancement.  The use of cash  reserves  held by the trusts and conduits is
     restricted under the terms of the securitized sales agreements. The maximum
     exposure  under all receivable  sale recourse  provisions at April 30, 2001
     was $412.4;  however,  management believes the recorded reserves for losses
     are adequate.

     The Corporation continues to service the receivables, for which a servicing
     fee is received.  Servicing fees are earned on a level yield basis over the
     terms of the related sold  receivables  and are  included in servicing  fee
     income. Servicing fees are typically set at 1.0% of average outstanding net
     receivable  balances,  representing  the  Corporation's  estimated costs to
     service the receivables.

     Gains or losses on sales of  receivables  are  dependent  upon the purchase
     price being allocated  between the carrying value of the  receivables  sold
     and the retained  interests  based upon their  relative  fair values.  Fair
     value  estimates are based upon the present  value of future  expected cash
     flows using  assumptions for prepayment  speeds and current market interest
     rates. These assumptions use management's best estimates  commensurate with
     the risks  involved.  Gains or losses are  credited or charged to financing
     revenue in the period in which the sales  occur.  An  allowance  for credit
     losses is provided  prior to the  receivable  sale and is  reclassified  to
     Amounts Due from Sales of Receivables upon sale.

     Finance  receivable  balances  do  not  include  receivables  sold  by  the
     Corporation  to  public  and  private   investors  with  limited   recourse
     provisions. Outstanding sold receivable balances are as follows:

                                   April 30         October 31      April 30
                                     2001              2000           2000
                                 -----------       ------------    -----------
                                                ($ Millions)

      Retail notes............      $2,421.3           $1,730.2       $2,223.7
      Wholesale notes.........         856.0              883.0          900.0
      Retail accounts.........         175.9               80.0               -
                                    --------           --------        --------
          Total...............      $3,453.2           $2,693.2       $3,123.7
                                    ========           ========        ========
<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


      The allowance for losses on serviced receivables is summarized as follows:
<TABLE>

<S>                                                              <C>            <C>          <C>
                                                           April 30     October 31     April 30
                                                             2001          2000          2000
                                                          ----------   ----------     ----------
                                                                      ($ Millions)


 Total allowance for losses at beginning of period....      $26.2         $26.2          $26.2
 Provision for losses.................................       14.1          12.1            3.7
 Credit losses net of recoveries......................      (10.3)        (12.1)          (3.7)
                                                            -----         -----          -----
 Total allowance for losses at end of period..........
                                                            $30.0         $26.2          $26.2
                                                            =====         =====          =====

</TABLE>

      Additional financial data for gross serviced finance receivables as of
April 30, 2001 is as follows:
<TABLE>
      <S>                                             <C>         <C>         <C>           <C>
                                                   Retail                Wholesale
                                                    Notes      Leases       Notes     Accounts
                                                -----------   --------   ----------  -----------
                                                                 ($ Millions)


      Gross serviced finance receivables.....      $2,964.7    $512.8      $1,085.6      $337.0
      Gross serviced finance receivables
        with installments past due
                over 30 days.................                                  10.1        23.4
                over 60 days.................          49.1      20.6
      Credit losses net of recoveries........           9.7       0.6           0.0         0.0
</TABLE>


     In the first quarter of fiscal 2001, in two separate sales, the Corporation
     sold $965 million of retail notes, net of unearned finance income,  through
     NFRRC.  The Corporation  sold $765 million of retail notes in November 2000
     to an owner trust  which,  in turn,  issued  securities  which were sold to
     investors  and  $200  million  of  retail  notes  in  December  2000  to  a
     multi-seller  asset-backed  commercial  paper conduit  sponsored by a major
     financial  institution.  Aggregate gains of $9.2 million were recognized on
     the sales.

     In April 2001, the  Corporation  sold $310 million of retail notes,  net of
     unearned  finance  income,  through NFRRC to an owner trust which, in turn,
     issued $400 million of asset-backed securities that were sold to investors.
     In May 2001,  the  Corporation  sold an  additional  $67  million of retail
     notes,  net of  unearned  finance  income,  to the same  owner  trust.  The
     Corporation  has the  ability to sell an  additional  $23 million of retail
     notes to the same owner trust on or before October 15, 2001. A gain of $8.8
     million was recognized on the initial sale in April 2001.
<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                                 (Unaudited)


     At April 30, 2001, NFSC has in place a revolving  wholesale note trust that
     provides for the funding of $1,012 million of eligible  wholesale notes. As
     of April 30, 2001 the trust is comprised of three $200 million  tranches of
     investor  certificates  maturing  in 2003,  2004 and 2008,  a $212  million
     tranche  of  investor  certificates  maturing  in 2005 and $200  million of
     variable funding certificates which mature in 2002. TRAC and TERFCO have in
     place revolving  retail account  conduits that each provide for the funding
     of $100 million of eligible retail accounts.

     When  receivables  are  sold,  the  Corporation  retains  interest  in  the
     securitized  receivables  in the form of  interest-only  strips,  servicing
     rights, cash reserve accounts and subordinated certificates.  The following
     is a summary of  retained  interests  included in Amounts Due from Sales of
     Receivables:
<TABLE>
<S>                                                              <C>             <C>            <C>
                                                           April 30      October 31       April 30
                                                             2001           2000            2000
                                                         ------------  ---------------  ------------
                                                                         ($ Millions)

      Cash held and invested by trusts..................    $176.3         $136.6          $157.6
      Subordinated retained interests in wholesale
      receivables.......................................     137.3          142.5           139.1
      Subordinated retained interests in retail
      receivables.......................................      82.0           50.6            53.0
      Interest only receivables.........................      16.8            0.1             3.5
      Allowance for credit losses.......................     (21.2)         (13.3)          (16.8)
                                                            ------         ------          ------
         Total..........................................    $391.2         $316.5          $336.4
                                                            ======         ======          ======
</TABLE>

     The fair  value of cash  deposits  included  in  amounts  due from sales of
     receivables approximate their carrying value due to their short-term nature
     and variable  interest rate terms. The subordinated  retained  interests in
     wholesale and retail  receivables  principally  consist of wholesale notes,
     retail accounts and certain cash collections on finance receivables. Due to
     the short-term nature of these assets the fair value approximates  carrying
     value.  The fair value of the  interest  only  receivables  are  derived by
     discounting expected future cash flows at estimated current market rates.

<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


     Key economic  assumptions  used in measuring the interest only strip at the
     date of the securitization for securitizations  completed during the fiscal
     year and at April 30,  2001 for all  outstanding  securitizations,  were as
     follows:
                                                  At date of        At April 30,
                                                Securitization          2001
                                               ---------------      ------------

     Prepayment speed........................     1.4%-1.6%         1.4%-1.6%
     Weighted average remaining life.........     41 months         30 months
     Residual cash flows discount rate.......    7.85%.- 9.61%     6.83% - 7.22%


     The impact of hypothetical 10% and 20% adverse changes in these assumptions
     would  have no  material  effect  on the fair  value of the  interest  only
     receivables at April 30, 2001.  These  sensitivities  are  hypothetical and
     should be used with  caution.  The effect of a  variation  of a  particular
     assumption on the fair value of the interest only receivables is calculated
     without changing any other  assumption;  in reality,  changes in one factor
     may result in changes in another.

     The following table  summarizes  certain cash flows received from and (paid
     to)  securitization  trusts/conduits  during the six months ended April 30,
     2001:
<TABLE>

                                                                                 ($ Millions)
                                                                                 ------------
<S>                                                                                 <C>
      Proceeds from initial sales of receivables.................................   $1,305.1
      Proceeds from subsequent sales of receivables into revolving facilities....    2,766.9
      Servicing fees received....................................................       16.3
      All other cash received from trusts........................................       65.1
      Purchase of delinquent or foreclosed receivables...........................      (50.7)
      Cash used for pool buybacks................................................     (106.1)
</TABLE>


5.   In November 2000,  the  Corporation  established  TERFCO for the purpose of
     securitizing  engine  accounts  receivable.   On  November  21,  2000,  the
     Corporation securitized all of its unsecured trade receivables generated by
     the sale of diesel engines and engine service parts from  International  to
     Ford Motor Company.  The  transaction  provides for funding of $100 million
     and expires in 2006. As of April 30, 2001 the Corporation has utilized $100
     million of this facility.


<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


     On October 16, 2000 Truck Retail  Instalment Paper  Corporation,  a special
     purpose, wholly-owned subsidiary of the Corporation, issued $475 million of
     a senior  class AAA rated and $25 million of a  subordinated  class A rated
     floating  rate  asset-backed  notes.  The  proceeds  were used to  purchase
     eligible  receivables from the Corporation and establish a revolving retail
     warehouse  facility for the  Corporation's  retail notes and retail leases,
     other than fair  market  value  leases.  The  Corporation  is  required  to
     maintain the revolving  retail  warehouse  facility with  collateral in the
     amount of $500 million.  In the event that retail note balances  pledged to
     the revolving retail warehouse facility fall below $500 million, the excess
     proceeds are invested in marketable  securities,  which are  restricted and
     have maturities of three months or less.

6.   On December 8, 2000,  the  Corporation  renegotiated  its revolving  credit
     facility  and added a  short-term  liquidity  facility.  The new  revolving
     credit facility provides for aggregate  borrowings of $820 million and will
     mature  in  November  2005.  Under  this  new  revolving  credit  facility,
     Navistar's three Mexican finance  subsidiaries  will be permitted to borrow
     up to $100  million  in the  aggregate,  which  will be  guaranteed  by the
     Corporation and Navistar. The short-term liquidity facility, which provided
     for aggregate borrowings of $80 million, was terminated in June 2001.

7.   The Corporation's total comprehensive income was as follows:

<TABLE>
                                                                   Three Months            Six Months
                                                                  Ended April 30         Ended April 30
                                                              --------------------    -------------------
<S>                                                             <C>       <C>             <C>       <C>
                                                                2001      2000            2001      2000
                                                                ----      ----            ----      ----
                                                                              ($ Millions)

       Net Income . . . . . . . . . . . .                      $12.8     $14.2           $25.6     $31.4
       Changes in unrealized gains (losses) on marketable
       securities.                                                 -       1.3               -      (0.5)
                                                               -----     -----           -----     -----
          Total Comprehensive Income. . .                      $12.8     $15.5           $25.6     $30.9
                                                               =====     =====           =====     =====
</TABLE>




<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION


     Certain   statements   under  this   caption,   which   involve  risks  and
     uncertainties, constitute "forward-looking statements" under the Securities
     Reform Act.  Navistar  Financial  Corporation's  actual  results may differ
     significantly   from  the  results   discussed   in  such   forward-looking
     statements. Factors that might cause such a difference include, but are not
     limited to, those discussed under the heading "Business Outlook."


Financing Volume

     In the first half of fiscal 2001 industry retail sales of Class 5 through 8
     trucks were  approximately  32% lower than 2000. The  Corporation's  retail
     financing  acquisitions in fiscal 2001,  including retail notes and finance
     and operating leases, were $494 million,  20% lower than 2000. The decrease
     was primarily due to a reduction in industry retail sales offset,  in part,
     by  an  increase  in  the   Corporation's   finance  market  share  of  new
     International trucks sold in the U.S. to 15.2% in 2001 from 12.9% in fiscal
     2000.  Serviced  retail  notes and lease  financing  balances  were  $3,195
     million and $3,040 million at April 30, 2001 and 2000, respectively.

     The Corporation  provided 96% of the wholesale financing of new trucks sold
     to  International's  dealers  in the first  half of  fiscal  2001 and 2000.
     Serviced  wholesale  note balances were $1,086 million at April 30, 2001, a
     19% decrease compared to the same period of 2000. The decrease is primarily
     due to a decrease in dealer  inventory levels in response to lower industry
     retail sales.


Results of Continuing Operations

     Pretax  income was $42  million and $49 million in the first half of fiscal
     2001 and 2000,  respectively.  The  decrease  was  primarily  the result of
     higher retail losses and lower average wholesale  balances offset, in part,
     by higher gains on sales of retail note receivables.

     Retail  note  financing  revenue  was $49 million in the first half of 2001
     compared to $32 million in 2000.  The increase is  primarily  the result of
     higher gains on sales of retail note  receivables.  Gains on the sales were
     $18 million on $1,275 million of retail note  receivables and $3 million on
     $1,008 million of retail note  receivables in the first half of fiscal 2001
     and 2000,  respectively.  The higher gains on sales resulted primarily from
     higher margins on retail notes due to declining market interest rates prior
     to  the  sale.   During  a  declining   interest  rate   environment,   the
     Corporation's  acquisition  spreads  improve as borrowing costs differ from
     the time when  interest  rates are  quoted to  borrowers  and the time when
     notes are acquired.


<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Results of Continuing Operations (continued)

     Lease financing  revenue was $50 million in the first half of 2001 compared
     to $45 million in 2000.  The increase is primarily  the result of continued
     growth in lease financing.

     Wholesale  note  revenue  was $25  million in the first half of fiscal 2001
     compared to $36  million in 2000.  The  decrease  is  primarily a result of
     lower average serviced wholesale balances.

     Retail and wholesale  account  revenue was $15 million in the first half of
     2001 compared to $23 million in fiscal 2000.  The decrease is primarily the
     result of lower average serviced balances.

     Marketable  securities  revenue  was $13  million in the first half of 2001
     compared to $1 million in 2000.  The increase was  primarily  the result of
     earnings  on  restricted  marketable  securities  held  as  collateral  for
     borrowings under the revolving retail warehouse facility.

     Borrowing  costs  increased $9 million to $59 million during the first half
     of 2001 primarily due to the lower average outstanding  accounts payable to
     affiliates  and an increase  in the  outstanding  balance of the  revolving
     retail  warehouse  facility  compared to the asset backed  commercial paper
     program.  The  Corporation's  weighted  average  interest  rate on all debt
     increased  to 6.4% in the first  half of 2001 from 6.2% in 2000 as a result
     of slightly increased credit spreads.

     Provision for losses on receivables  totaled $14 million for the first half
     of 2001 compared to $4 million in 2000.  The increase in 2001 was primarily
     due to an increase in  repossession  frequency and pricing  pressure in the
     used truck market.  The Corporation's  allowance for losses as a percentage
     of serviced finance  receivables was .66%, .54% and .54% at April 30, 2001,
     October 31, 2000 and April 30, 2000, respectively.

     Depreciation and other expenses  increased to $30 million in the first half
     of 2001 from $26 million in 2000.  The increase is primarily  the result of
     higher  depreciation  on a larger  investment in equipment  under operating
     leases.

<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Liquidity and Funds Management

     The Corporation has  traditionally  obtained the funds to provide financing
     to  International's  dealers  and  retail  customers  from sales of finance
     receivables,  commercial paper, short and long-term bank borrowings, medium
     and  long-term  debt and equity  capital.  The  Corporation's  current debt
     ratings have made sales of finance  receivables the most economical  source
     of funding.

     In May 2001,  Moody's  and Fitch  lowered  the  Corporation's  senior  debt
     ratings  to Ba1 and  BBB-  from  Baa3  and  BBB.  Fitch  also  lowered  the
     Corporation's subordinated debt ratings to BB from BBB-.

     Operations used $199 million in cash in the first half of 2001 primarily as
     a result  of the  decrease  of $254  million  in net  accounts  payable  to
     affiliates.  Financing  activities  used $658  million to decrease the bank
     revolving credit facility and the revolving  retail warehouse  facility and
     to pay dividends of $26 million.  To fund the cash used by  operations  and
     financing  activities,  investing  activities provided $861 million in cash
     during  this  period  primarily  as a result of the sale of  retail  notes,
     offset by the purchases of retail notes and lease receivables.

     In the first half of fiscal 2001, in three separate sales,  the Corporation
     sold  $1,275  million of retail  notes,  net of  unearned  finance  income,
     through Navistar  Financial Retail  Receivables  Corporation  ("NFRRC"),  a
     special  purpose,   wholly-owned   subsidiary  of  the   Corporation.   The
     Corporation  sold $765 million of retail notes in November 2000 to an owner
     trust which, in turn,  issued  securities  which were sold to investors and
     $200  million  of  retail  notes  in  December   2000  to  a   multi-seller
     asset-backed  commercial  paper  conduit  sponsored  by a  major  financial
     institution.  The  Corporation  also sold $310 million of retail notes,  in
     April  2001,  to an owner trust  which,  in turn,  issued  $400  million of
     asset-backed  securities  that were  sold to  investors.  In May 2001,  the
     Corporation sold an additional $67 million of retail notes, net of unearned
     finance income, to the same owner trust. The Corporation has the ability to
     sell an  additional  $23 million of retail notes to the same owner trust on
     or before October 15, 2001.  Aggregate gains of $18 million were recognized
     on the sales. At April 30, 2001, the remaining shelf registration available
     to NFRRC  for the  public  issuance  of  asset-backed  securities  was $618
     million.

     In November  2000, the  Corporation  established  Truck Engine  Receivables
     Financing Corporation,  a special purpose,  wholly-owned  subsidiary of the
     Corporation, for the purpose of securitizing engine accounts receivable. On
     November 21, 2000, the  Corporation  securitized all of its unsecured trade
     receivables  generated  by the sale of diesel  engines  and engine  service
     parts from  International to Ford Motor Company.  The transaction  provides
     for funding of $100  million and expires in 2006.  As of April 30, 2001 the
     Corporation has utilized $100 million of this facility.
<PAGE>

                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Liquidity and Funds Management (continued)

     Truck  Retail  Accounts  Corporation,   a  special  purpose,   wholly-owned
     subsidiary  of the  Corporation,  has in place a revolving  retail  account
     conduit that  provides  for the funding of $100 million of eligible  retail
     accounts.  As of April 30, 2001 the Corporation has utilized $76 million of
     this  facility.  The  facility  expires  in August  2001 with an option for
     renewal.

     At April 30, 2001, Navistar Financial  Securities  Corporation  ("NFSC"), a
     special purpose, wholly-owned subsidiary of the Corporation, has in place a
     revolving  wholesale  note trust that  provides  for the  funding of $1,012
     million of eligible  wholesale notes. It is comprised of three $200 million
     tranches of investor  certificates  maturing in 2003, 2004 and 2008, a $212
     million  tranche of investor  certificates  maturing  in 2005 and  variable
     funding  certificates  with a maximum  capacity of $200 million maturing in
     January 2002.  As of April 30, 2001,  NFSC has utilized $856 million of the
     revolving  wholesale note trust. In the third quarter 2001, the Corporation
     lowered the outstanding variable funding certificates held by NFSC from $75
     million to $0  million  increasing  the  Corporations  availability  by $75
     million.

     At April  30,  2001,  available  funding  under the bank  revolving  credit
     facilities,  the  revolving  retail  warehouse  facility and the  revolving
     wholesale note trust was $813 million. When combined with unrestricted cash
     and cash  equivalents,  $859  million  was  available  to fund the  general
     business purposes of the Corporation.


Business Outlook

     The truck industry in 2001 is forecasted to decrease approximately 31% from
     2000.  Volatility  in the  capital  markets  is  likely  to put  additional
     pressure  on  the  funding  rates  offered  to  the   Corporation   in  the
     asset-backed  public  market,  commercial  paper  markets  and  other  debt
     financing  markets.  Additionally,  high fuel costs may further  impact the
     financial  strength of the  Corporation's  customers and the  Corporation's
     ability to maintain the current level of portfolio quality.

     Management  believes  that  collections  on  the  outstanding   receivables
     portfolio  plus  cash  available  from the  Corporation's  various  funding
     sources will permit  Navistar  Financial  Corporation to meet the financing
     requirements of  International's  dealers and retail customers through 2001
     and beyond.



<PAGE>




                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


PART II - OTHER INFORMATION


Item 6.        Exhibits and Reports on Form 8-K

         The Registrant filed the following report on Form 8-K during the six
months ended April 30, 2001:

(i) Form 8-K dated November 6, 2000, discussed several current events. It
referenced the securitization of the retail accounts, the new revolving retail
warehouse facility, the November 2000 retail receivables issuance in asset
backed securities, the plan to securitize unsecured trade receivables and the
plan to enter into a new credit agreement.




                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                         Navistar Financial Corporation
                         ------------------------------
                                  (Registrant)






Date June 14, 2001                            /s/R. D. Markle
     -------------                            ---------------------------------
                                                  R. D. Markle
                                                  Vice President and Controller
                                                  (Principal Accounting Officer)