Adios, Amigo: Isuzu Riding Off into American Sunset
April 11, 2008

By Peter Nunn

Call it the classic long goodbye. Isuzu has announced it will call a halt to North American SUV sales in January 2009, but the news shouldn’t come as too much of a shock to anyone who’s been watching Isuzu of late.

Fact is, Isuzu’s fortunes have been on the wane for some while now as its long-term tie-up with General Motors has slowly unraveled and it’s been forced to rely on rebadged GM vehicles to keep sales alive.

It’s a sad finale for a Japanese company that once built a whole batch of cool-looking enthusiast cars, such as the early '80s Impulse coupe and later I-Mark and Stylus sedans. A company that turned its hand to some very well received show cars, the 1989 4200R, the 1993 VehiCROSS and 2001 GBX, to name but three. A company that later forged a successful business building SUVs such as the Trooper, Rodeo and Axiom until the economics of a harsh business environment dictated otherwise.

Commercial Vehicles, Diesel Engines to Stay
Not that Isuzu is rolling up the carpet in the U.S. completely. Far from it. Isuzu’s North American business comprises heavy-duty trucks and SUVs as well as the production and supply of diesel engines. The commercial vehicles and diesel engines will continue. So will the warranties, parts and service on Isuzu SUVs in the U.S.

Across in Japan, Isuzu continues to be a major player in commercial vehicles and diesels and, as its 37-year GM connection has progressively wound down, a new collaborative deal with Toyota has opened right up.

Isuzu and Toyota are now planning a new generation of lightweight 1.6-liter diesel engines together and Isuzu is also working with Hino Motors, a Toyota subsidiary, to co-develop cabins and next-generation exhaust aftertreatment systems for heavy-duty trucks.

So Isuzu is still very much up and running, and some might also say working with Toyota — the world’s most successful and richest auto company — is not exactly a bad idea.

Isuzu is also nicely profitable, posting a ¥92 billion (about $860 million) net income for the latest 2007 business year — that’s more than Suzuki or Mazda earned. And it's a stark contrast to the crisis-torn late '90s and early '00s, when Isuzu was very firmly in the red.

The decision to end SUV sales in North America stemmed from the fact that there are no next-generation vehicles in the pipeline, either Isuzu’s own or GM-sourced. Also, Isuzu’s SUV sales have slowed to a trickle, so it was really a no-brainer.

Isuzu has been selling the Ascender, a revamped Chevrolet TrailBlazer/GMC Envoy, as well as the i-series pickups, derived from the Chevrolet Colorado/GMC Canyon.

Polynomial Presence
Isuzu’s North American SUV business began with the formation of American Isuzu Motors Inc. back in 1980 and in 1999, sales surpassed 100,000 units annually. But last year, sales fell down to 7,000 units.

Isuzu is surely best known in the U.S. for sturdy, honest 4x4s like the Rodeo and Trooper, which made up in toughness what they maybe lacked in sophistication, and helped pioneer America’s SUV craze.

The Rodeo was one of the vehicles made at the SIA plant in Lafayette, Ind., the factory set up in 1987 and run jointly by Isuzu and Fuji Heavy Industries (Subaru’s parent company).

Like the Trooper, the Rodeo was a true global player. Sold in collaboration with GM, it appeared variously as the Amigo, Mu and Frontera. Honda also sold it for a while in the U.S. as the Passport. 

The Trooper, likewise, rejoiced in names as diverse as Big Horn, Monterey, Horizon and Jackeroo, depending on whether this was North America, Europe, Japan or Australia. There was even an Acura version too, the SLX.

Isuzu first reached a turning point in 1992 when it decided it didn’t have the cash to develop a new series of Gemini compact sedans and coupes.

The Gemini, better known in the U.S. as the I-Mark, Stylus and Geo Storm, was a stylish little car (designed by Shiro Nakamura, today design vice president of Nissan).

Shift of Focus
But competition from Toyota, Nissan and Honda in that segment was just too tough, so a new Gemini series was cancelled and Isuzu decided to cut its losses and concentrate on SUVs, commercial vehicles and diesels instead. 

It was a smart move. Business by the mid '90s was good and in September 1998, Isuzu and GM took a step further by setting up DMAX, a diesel-engine production company in Moraine, Ohio. DMAX currently builds 6.6-liter V8 Duramax turbodiesels for GM (Chevrolet and GMC brands) and in May 2007, DMAX made its 1 millionth engine.

In 1999, GM upped its stake in Isuzu to 49 percent, but the tide was ebbing for the Japanese company. The economic decline in Japan and Asia hammered Isuzu badly and soon it was struggling with four successive years of losses.

A massive restructuring “V” plan announced in May 2001 shuttered Isuzu’s Japanese SUV production, slashed costs and laid off workers.

The next year, GM turned the screws by offering some $500 million to take control of Isuzu’s two profitable diesel-engine operations — DMAX in the U.S. and Isuzu Motors Polska, in Poland — while at the same time lowering its equity stake in Isuzu down to 12 percent. GM also bought ownership rights to Isuzu’s diesel engines.

Then in December 2002, Isuzu sold its stake in the SIA manufacturing operation in Indiana to Fuji Heavy Industries, but with FHI still building the Rodeo and Axiom on Isuzu’s behalf.

Diesel Deliverance
Isuzu was still a major diesel operator, supplying engines to Opel and Saab in Europe as well as to Honda (for the Civic) and of course GM. But in 2003, Isuzu pulled out of Canada, then production of the Rodeo and Axiom finally came to a halt.

Into 2005 and Isuzu begins selling the GM-sourced Ascender SUV in both five- and seven-seat forms in the U.S., as well as the i280 and i350 pickups. The latter duly become the bigger-engined i290 and i370 and like the Ascender, are U.S.–made. 

Sales, however, have been slowing, so it’s hardly a surprise they’re not being replaced.

Cash-strapped GM sold its stake in Isuzu in April 2006 but to show there would be no hard feelings, two months later the two companies agreed to establish the "LCV Platform Engineering Corporation" in Japan to develop a next-generation pickup and its platform. It’s a lifeline for Isuzu but a far cry from the go-go era of the past with GM.

Then out of the blue comes Toyota, buying a 5.9 percent stake in Isuzu in November 2006 to ramp up its diesel engine know-how. Toyota is behind the likes of Honda when it comes to smooth, "clean," cutting-edge diesels for passenger cars. How to get up to speed? Go to Isuzu, an acknowledged diesel expert.

Toyota and Isuzu are now collaborating over the design and production of new-generation aluminum-block 1.6-liter diesels for the EC market. But with the diesel market in the U.S. seemingly set for take-off, it’s hard to see why these engines — due to come into production in 2012 — shouldn’t make it Stateside too, maybe in the Corolla.

Isuzu is also working with Toyota on new emission-control technologies and research into alternative fuels.

At the same time, Isuzu is about to a launch an aggressive new midterm business plan, which targets a 50 percent increase in operating profit to ¥150 billion (about $1.4 billion) by March 2011, among other goals. With the Toyota connection now on board, who’s to say it won’t get there?

Asian Accomplishments
Little known in the U.S., but Isuzu is also active in Asia with its self-developed range of rugged SUVs and pickups. The Thai-made MU-7 is a big seven-seat SUV. Also from Thailand is the D-Max pickup, and the Panther is a smaller SUV made in Indonesia.

All use a range of Isuzu’s own 2.5-3.0-liter four-cylinder turbodiesels and provide a useful source of extra income to Isuzu mainstream operations.

Isuzu will still be in North America with its commercial trucks and diesel engines once the Ascender i-series pickups end their run next January.

But with offerings such as the VehiCROSS, Trooper, Impulse, Axiom and Hombre, Isuzu once had an appealingly alternative range all of its own. Too bad we won’t be seeing their likes again. Instead, for Isuzu, a very different kind of future lies ahead.

Photo 1: Isuzu Amigo
Photo 2: Isuzu i-series pickups, Ascender
Photo 3: Isuzu Panther (Indonesia)

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