Toyota Motor Corporation and Isuzu Motors will be dissolving a 12-year old capital tie-up as both automakers recalibrate their growth strategies. The separation, according to Nikkei, was partly due to the declining global uptake of the diesel fuel.
The partnership was formed in 2006 when Toyota acquired a 5.89% stake in Isuzu to jointly develop a 1.6 litre diesel engine for small passenger cars in Europe. Isuzu is strong in diesel technology, an area where Toyota hoped to improve through the partnership. Now, Toyota is looking to shift its focus to hybrid vehicles, hence the dissolution.
Strict regulations and scrutiny over the diesel fuel in UK, Europe and China were likely behind the decision, but Isuzu senior executive Koichi Seto denies that. “There were no gains from the capital tie-up,” he said. Starting this year, Toyota will no longer sell new passenger cars with diesel engines in Europe.
Since then, Toyota has accelerated reviews of its operations and costs, including investments in other companies. A company executive said “we completely re-evaluated our strategic stockholdings,” and the auto giant will proceed with truck and bus development through subsidiary Hino Motors, which has already developed a hybrid truck and are currently looking to co-develop diesel and electric vehicles with Volkswagen’s bus and truck division.
Isuzu, on the other hand, is looking for a new collaborator. It’s the only major Japanese producer of commercial vehicles without a European partner. For example, Mitsubishi Fuso Truck and Bus is backed by Daimler, and UD Trucks by Volvo.
In 2016, Isuzu and Mazda announced an agreement to co-develop a pick-up truck, the result of which has yet to be seen. The current D-Max was jointly developed with General Motors (GM), and the Chevrolet Colorado shares the same platform.
Isuzu’s net profit climbed 16% on the year to 38.1 billion yen (RM1.4 billion) in the April-June quarter. While favourable, Nikkei stated that it will be difficult for a smaller automaker like Isuzu to survive on its own in the long run without big boy collaborators. A 35-year capital tie-up with GM ended in 2006, prompting the partnership with Toyota. As that relationship draws to a close, a new potential partner has yet to appear. Despite this, Isuzu and Toyota will continue to “maintain good ties” and collaborate whenever possible.
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Abesla Isuzu! Dah kena game by Toyota!
You forge a partnership bcoz there is synergies & markets where both can profit from. It is only natural to go your separate way when the demand for diesel is faltering due to demand & environmental issues. That is smart business acumen.
After Toyota gained essential diesel tech from Isuzu. Lolz!
Toyota’s 2.2l diesel engine (used in the Avensis) had quite a bad name in Europe. It was powerful, but very unreliable. Additionally, the service intervals were 15k km only (while competitors had already service intervals of 30k km), which made it unattractive for company fleet buyers (85% of all Passat sold in Europe are company cars).
No wonder Toyota withdraw from the diesel market, as it never had a real chance to compete.