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Isuzu To Leave U.S. Market Next Year

Monday, February 11, 2008 - 01:00
After an eight-year sales slide in the U.S., Isuzu Motors Ltd. is leaving the U.S. auto sales wars. Isuzu said in late January it would stop selling its pickup trucks and SUVs in the U.S. early next year. Isuzu had originally been a pioneer in the American SUV market.

The exit marks the first departure of an Asian automotive company since Daewoo Motor Company withdrew in 2002 after skidding into bankruptcy. It marks the first withdrawal of a Japanese auto company since Diahatsu folded its tent and left the U.S. many years ago.

Isuzu's prospects have been in doubt ever since General Motors, its partner since 1971, began reducing its 49 percent stake in Isuzu six years ago. General Motors produces the two vehicles Isuzu currently sells in the U.S. — the Ascender SUV, which was launched in 2004 and the i-Series pickup trucks which rolled out one year later.

"The rebadged GM trucks struggled in competitive segments dominated by automakers with strong brands and large dealer networks," said Tom Libby, senior director of industry analysis at J.D. Power and Associates Power Information Network. "Isuzu didn't have any of those things."

After peaking at sales of 103.937 units in 1999, Isuzu's sales in the U.S. fell every year since then. In 2007, they were down to only 7,098 vehicle sales.

Libby said he was not surprised by Isuzu's decision to withdraw. "When we saw their (market) share continue to dwindle, it seemed like the next step."

In the U.S. market, Isuzu was best known for its Trooper SUV, which was introduced in 1983. The automaker also partnered with another of GM's Japanese affiliates, Subaru, to expand its line up and sales. But in recent years, Isuzu had the smallest market share of any Japanese brand competing in the U.S. market. Its share rounded to zero in 2007, down from 0.1 in 2006, according to Autodata Corp.

"I can confirm that Isuzu will discontinue distribution of light passenger vehicles — SUVs and pickups — effective January 12, 2009," said Chip Letzgus, a spokesman for Isuzu Motors America located in Cerritos, California.

Isuzu will continue to provide service and parts for those vehicles and it will still sell commercial vehicles and diesel engines in the United States.

According to Bloomberg News, Isuzu officials in Japan said the company expected to record a $37 million dollar loss over the next two years related to the pull out from the U.S. light vehicle market. Isuzu Motors America has 199 (nearly 200) U.S. dealers.

In 2006 Toyota Motor Corp acquired 5.9 percent of Isuzu after General Motors sold its last shares in Isuzu, its former partner.

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