Isuzu Motors buys land in Alabama to resume US truck production

04/09/07 - newratings.com

LONDON, April 9 (newratings.com) – Isuzu Motors Ltd (ISU), Japan's largest maker of light-duty trucks, Monday announced that it has purchased land for a US truck plant in Alabama, pushing ahead its plans to resume vehicle production in the US in order to spur sales in the world's largest auto market.

Tokyo-based Isuzu Motors’ spokesman, Naoki Ariizumi, said that the company has bought 540,000 square meters (133 acres) near Pinson, north of Birmingham, for $7.8 million in December. Isuzu Motors’ President, Yoshinori Ida, had earlier said in December that the company will prefer to build an assembly plant in North America, if annual sales in the region reach 50,000 units, from about 33,000 units sold in 2006. Although the company had refrained from providing details on the planned factory, a source has disclosed that the plant was scheduled to come online around 2010, with an initial annual production capacity of several thousand units, Reuters reported. After the completion of the plant in Alabama, Isuzu Motors, 5.9% owned by Toyota Motor Corp, will join the league of Honda Motor Co and Hyundai Motor Co, both of which have factories in the state.

A truck production plant in the US will help Isuzu Motors compete more effectively with DaimlerChrysler AG and Paccar Inc, the world's biggest and third-largest truckmaker respectively.

The company, which witnesses 60% of its sales in overseas markets, had ended vehicle production in the US and pulled out of a joint vehicle production venture with Fuji Heavy Industries Ltd in 2002 in order to cut losses.