Strong Second Quarter For Isuzu

Anthony Fontanelle
August 7, 2007

Japanese automakers are enjoying much success in the global auto market. Toyota is expected to surpass General Motors as the largest automaker by the end of the year. Honda and Nissan are also increasing their share in the United States auto market. But these three automakers are not the only Japanese firms enjoying success. Isuzu, the only Japanese independent truck maker reported strong sales for the second quarter of the year. This strong sale is coupled with weak yen to give Isuzu a profit increase of 14 percent for the second quarter of the year.

The truck manufacturer reported that the demand for their vehicles has increased in the Middle East and South Africa. And since yen is currently weaker, they are able to increase their gain.

According to Isuzu, they turned a profit of 21.2 billion yen for the second quarter of the year, an equivalent of about $179 million. For the second quarter of last year, Isuzu reported profits reaching 18.5 billion yen.

The truck manufacturer - just like Toyota, Honda and Nissan - has seen domestic sales drop these past years. But outside the country, Isuzu continues to post increased sales. With the weak value of yen, Isuzu is able to manufacture their products in Japan and also able to import them to other countries. Since they are produced significantly cheaper in Japan, Isuzu was able to compete better in the global auto market by offering lower priced vehicles.

According to Isuzu, the demand for trucks has increased in countries where natural resources are being taped. With more and more countries being industrialized, sales for Isuzu are expected to increase in the near future. With overseas sales accounting for 60 percent of the total sale of the truck maker, it is expected that Isuzu will be turning out more profit in the future

The Toyota Motor Corp. owns 5.9 percent of Isuzu and the tie-up between the ToMoCo and Isuzu will benefit the latter in the long run. With the already wide market base for Isuzu, they are in a position to expand their offerings. With to expertise of Toyota in the auto industry, it can help Isuzu in the development of future models whether for commercial or passenger use.

A concrete example of Isuzu’s expansion is their agreement with Russian Severstal-Avto. The said deal concerns the manufacturing of 25,000 commercial vehicles in a year in Russia. The country is also a growing commercial vehicle market. Several automakers have been increasing their presence in the said country and Isuzu has joined the bandwagon which also includes the second largest truck and bus manufacturer, Volvo Trucks.

The deal with the Russian firm saw Isuzu owning 29 percent of the venture. The said venture will increase the presence of the Japanese truck maker in the growing Russian market. The assembly facility that will be put up will be manufacturing entire commercial vehicles and truck parts such as Isuzu pickup radiators.

Meanwhile, the tie-up between Toyota and Isuzu is expected to come out with new generation of diesel engines. These engines are expected to meet the strictest emission standards. This is another move on the part of Toyota to champion their cause in protecting the environment. This will also make Isuzu more competitive in the global auto market. Toyota’s Hino Motors Ltd. is also in talks with Isuzu. The talks may be concerning a possible tie-up between the two truck makers. Hino has a strong market foundation and Isuzu can benefit from this if the two Japanese truck makers close a deal.

Source:  Amazines.com