UPDATE: Isuzu Considering Options For Tie-Upgrades, Including Volkswagen
22 Avril 2011 - 6:59AM
Dow Jones News
Isuzu Motors Ltd. (7202.TO) is considering various partners for
possible tie-ups, including Germany's Volkswagen AG (VOW.XE), to
better expand its global reach, especially in emerging markets.
The Japanese truck maker said Friday it is considering a wide
range of possible tie-ups in with potential partners, including
Volkswagen, but no decision had been made.
"It's hard to do everything by ourselves to allow strengthening
of our sales activities and product lineup," said a company
spokesman. "That prompted us to study a variety of possibilities
for tie-ups," he said without elaborating.
Investor hopes are high that a more substantial capital alliance
with a global auto company could help Isuzu expand in such red-hot
overseas markets as China and India to offset sluggish demand at
home.
Isuzu, in which Toyota Motor Corp. (7203.TO) owns a 6% stake,
remains the only independent truck maker based in Japan.
Most Japanese truck makers have been operating under the
umbrellas of bigger peers. Hino Motors Ltd. (7205.TO) is a
subsidiary of Toyota, while Mitsubishi Fuso Truck and Bus Corp. is
owned by Daimler AG (DAI.XE). UD Trucks Corp. is the Japanese
truck-manufacturing unit of AB Volvo (VOLV-B.SK).
On the Tokyo Stock Exchange, investors gave the company's shares
received a warm reception. The issue was 1.8% higher at Y340 midday
after gaining to intraday high of Y344.
"For Isuzu, it's positive in the sense that it can expand its
sales network for engines and likely reflects its desire to secure
other channels in addition to Toyota," said Yoshihiro Okumura,
general manager at Chibagin Asset Management.
While the scenerio is denied by Isuzu, Okumura said an ideal and
realistic framework for future capital ties would be for the
Japanese truck maker and Volkswagen to acquire stakes in each other
that are small enough for Isuzu to maintain a favorable
relationship with Toyota.
Isuzu's comments come after the Nikkei reported Friday that it
has been negotiating with Volkswagen for a tie-up involving the
mutual supply of truck engines and related technologies.
The report said the two firms will soon sign a confidentiality
agreement and enter into full-scale talks with an eye toward
signing a deal this autumn. Depending on how the negotiations
proceed, they will also consider acquiring stakes in each other,
the report said.
But Isuzu said there was no truth to the report that the two
companies will consider mutual shareholding.
-By Hiroyuki Kachi, Dow Jones Newswires; 813-6269-2789;
Hiroyuki.Kachi@dowjones.com
(Kana Inagaki contributed to this article)
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