Isuzu Motors Ltd., which helped popularize sport-utility vehicles in the 1980s, said it will exit the U.S. consumer auto market next year, the first departure by an Asian brand since 2002.
Sales of Ascender SUVs and i-series pickup trucks, both supplied by General Motors Corp., will halt at the end of January 2009, Isuzu said today in a statement. U.S. demand for the company’s vehicles has fallen 93 percent in eight years.
“There are no forecasts for continuation of the SUV business through introduction of a next-generation vehicle,” Tokyo-based Isuzu said.
Isuzu’s boxy Trooper sparked interest in truck-based SUVs in the late 1980s, helping push its U.S. sales to a peak of 103,629 in 1999. Since then, it’s had the industry’s steepest decline, selling just 7,098 vehicles last year — the smallest volume for any Asia-based brand in the U.S.
“They were right there at the start of the SUV boom with a product that was really competitive,” said Jim Hossack, an industry analyst for Tustin, California-based AutoPacific Inc. Hossack was a Chrysler engineer when Isuzu started selling Troopers in the 1980s.
Not since South Korea’s former Daewoo Motor Co. fell into bankruptcy has an Asian automaker pulled out of the U.S. market.
4 Billion Yen Loss
Isuzu will record a loss of about 4 billion yen ($37 million) related to the U.S. move over the next two fiscal years, spokesman Tadashi Ioka said at a Tokyo press briefing.
“They failed to play to their strength, traditional SUVs, and ultimately didn’t have the resources to keep investing in products for the U.S.,” Hossack said in an interview.
Isuzu said it will continue to provide service and parts for consumer models, and sell commercial vehicles, diesel engines and components in the U.S.
GM owned 49 percent of Isuzu until 2002, selling its remaining 90 million shares last year. Toyota Motor Corp., Japan’s biggest automaker, has a 5.9 percent stake in Isuzu.
The company has “about 200” remaining U.S. dealers, said Chip Letzgus, a spokesman for Cerritos, California-based Isuzu Motors America. Letzgus wasn’t immediately able to comment on the company’s plans.
Isuzu rose 1 yen to 434 yen in Tokyo Stock Exchange composite trading earlier today. The shares have fallen 24 percent in the past year.
1 comment so far ↓
The whole industry prices for SUVs and trucks has declined nearly 25 percent, which is approximately four times the normal depreciation expected over this period and well in excess of the depreciation expected over a full year.”
Last week was a busy week for the dealership because of the deals the stores have going on – 0 percent interest for 72 months vs. the typical 6.9 percent interest. These deals are just to get rid of SUVs.
BUT hybrids are in high demand and that is good for the new direction we need to take in respect to fuel efficiency
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