Japan's Isuzu eyes business tie-up with Volkswagen

Japan's Isuzu Motors Japanese truck maker Isuzu Motors Ltd. said it was considering a business tie-up with Volkswagen AG of Germany. "We are discussing cooperation as it's hard to develop and produce vehicles by ourselves amid the current tough business conditions," an Isuzu spokesman said on Friday.
The company said in a statement that it was "broadly considering possible collaborations with Volkswagen, but nothing has been decided."
Isuzu issued the statement after the Nikkei business daily reported that the two firms had started negotiations on a truck business tie-up.
The daily said they would soon sign a confidentiality agreement and enter into full-scale talks, with an eye towards signing a deal later this year.
According to the Nikkei, Isuzu would supply midsize diesel engines to Volkswagen, while the German automaker would provide advanced technology to the Japanese company. They would also begin joint procurement of engine components.
Isuzu would likely supply a seven-litre diesel engine for midsize trucks for Volkswagen, as well as providing a three-litre diesel engine for use in Volkswagen commercial vans and small trucks, it said.
From Volkswagen, Isuzu would receive engine control and body safety technology used in the German automaker's passenger cars, it said.
The two firms may expand their cooperation to include development of hybrids, electric vehicles and other environment-related technology, it added.
By sharing pickup truck technology, Volkswagen would be able to cut costs and lower prices, which is crucial to boosting market share in emerging countries, the Nikkei said.
Isuzu ended a 35-year tie-up with General Motors in 2006. Toyota Motor Corp. now holds a 5.9 percent stake in Isuzu.