Report: Isuzu To Exit Bus Joint Venture In China

8 February 2008

The Nikkei reports that Isuzu Motors Ltd. plans to withdraw from its bus joint venture with Guangzhou Automobile Group Co.

Isuzu is in the final stages of negotiations to sell its 49% stake in Guangzhou Isuzu Bus Co. to Guangzhou Automobile, sources close to the Chinese automaker said. The two sides are seeking an agreement by the end of March. The joint venture was established in 2000, producing and selling midsize and large buses.

The Chinese commercial vehicle market has been inundated with low-cost buses made by local manufacturers and South Korean rivals. Sales of the high-grade buses Isuzu produces at the joint venture have slumped. Despite having the capacity to produce 1,000 buses annually, Guangzhou Isuzu Bus sold only 150-200 units a year. This would mark the first time that a Japanese manufacturer has canceled a finished-vehicle joint venture in China.

Isuzu will continue with Qingling Motors Co., its truck joint venture. Guangzhou Automobile will likely continue operating the bus subsidiary.