Isuzu Wants to Review, Possibly End GM Joint Venture (Update2)
Isuzu Motors Ltd., Japan’s largest maker of light trucks, is seeking talks with General Motors Co. to review and possibly pull out of a joint engine-making factory in the U.S. that may operate at 30 percent capacity next year.
Ending joint production at the Ohio plant “may be an option,” Isuzu President Susumu Hosoi said in an interview at the company’s headquarters in Tokyo last week. The venture, DMAX Ltd., is 60 percent owned by GM and makes diesel engines for the Detroit-based automaker.
Isuzu would be the latest of several automakers including Toyota Motor Corp. to abandon ventures with GM after the U.S. carmaker emerged from bankruptcy earlier this year. The Japanese truckmaker rose 6.8 percent, the second-biggest gain among companies in the Nikkei 225 Stock Average, to close at 172 yen on the Tokyo Stock Exchange.
“It would be best for Isuzu to end its partnership with GM,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo. “The U.S. market will likely recover next year, but I don’t think demand for large vehicles like SUVs will recover.”
‘No Plans to Change’
GM took over its Canadian carmaking venture with Suzuki Motor Corp. earlier this month after ending an equity alliance with the Japanese carmaker in November 2008. The U.S. carmaker also terminated a joint production arrangement with Toyota in June, abandoning the New United Motor Manufacturing Inc. factory in Fremont, California, as part of a bankruptcy reorganization.
“There are no plans to change the relationship with Isuzu in regard to the DMAX plant,” Tom Read, a GM spokesman in Warren, Michigan, said in an e-mail.
U.S. sales of GM’s Chevrolet Silverado full-size pickup, which uses DMAX’s engines, dropped 34 percent in the first 11 months of this year.
“Our venture in North America serves large-size vehicles, and there is　definitely a question mark on that market,” Isuzu’s Hosoi said. “I want to ask GM what their thinking is.”
Polish Venture
Isuzu and GM also have a joint diesel-engine production venture in Poland that may need to be reviewed as well, Hosoi said.
Separately, Isuzu is aiming to introduce a small truck developed for emerging markets next fiscal year, Hosoi said. The rollout will begin in Indonesia and Vietnam and may be followed by other Asian and Latin American markets, he said.
The company’s truck sales in Southeast Asia may rise to as many as 50,000 vehicles a year, from about 30,000 now, after the new model is introduced, Hosoi said. Truck sales in China excluding pickups may rise to about 45,000 next year from about 35,000, he said.
Isuzu also plans to introduce a small plug-in hybrid truck in a few years, spokesman Koichi Ito said. The Asahi Shimbun reported the news about the hybrid truck earlier today.
Source: Isuzu Wants to Review, Possibly End GM Joint Venture (Update2)
Ending joint production at the Ohio plant “may be an option,” Isuzu President Susumu Hosoi said in an interview at the company’s headquarters in Tokyo last week. The venture, DMAX Ltd., is 60 percent owned by GM and makes diesel engines for the Detroit-based automaker.
Isuzu would be the latest of several automakers including Toyota Motor Corp. to abandon ventures with GM after the U.S. carmaker emerged from bankruptcy earlier this year. The Japanese truckmaker rose 6.8 percent, the second-biggest gain among companies in the Nikkei 225 Stock Average, to close at 172 yen on the Tokyo Stock Exchange.
“It would be best for Isuzu to end its partnership with GM,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo. “The U.S. market will likely recover next year, but I don’t think demand for large vehicles like SUVs will recover.”
‘No Plans to Change’
GM took over its Canadian carmaking venture with Suzuki Motor Corp. earlier this month after ending an equity alliance with the Japanese carmaker in November 2008. The U.S. carmaker also terminated a joint production arrangement with Toyota in June, abandoning the New United Motor Manufacturing Inc. factory in Fremont, California, as part of a bankruptcy reorganization.
“There are no plans to change the relationship with Isuzu in regard to the DMAX plant,” Tom Read, a GM spokesman in Warren, Michigan, said in an e-mail.
U.S. sales of GM’s Chevrolet Silverado full-size pickup, which uses DMAX’s engines, dropped 34 percent in the first 11 months of this year.
“Our venture in North America serves large-size vehicles, and there is　definitely a question mark on that market,” Isuzu’s Hosoi said. “I want to ask GM what their thinking is.”
Polish Venture
Isuzu and GM also have a joint diesel-engine production venture in Poland that may need to be reviewed as well, Hosoi said.
Separately, Isuzu is aiming to introduce a small truck developed for emerging markets next fiscal year, Hosoi said. The rollout will begin in Indonesia and Vietnam and may be followed by other Asian and Latin American markets, he said.
The company’s truck sales in Southeast Asia may rise to as many as 50,000 vehicles a year, from about 30,000 now, after the new model is introduced, Hosoi said. Truck sales in China excluding pickups may rise to about 45,000 next year from about 35,000, he said.
Isuzu also plans to introduce a small plug-in hybrid truck in a few years, spokesman Koichi Ito said. The Asahi Shimbun reported the news about the hybrid truck earlier today.
Source: Isuzu Wants to Review, Possibly End GM Joint Venture (Update2)
