GM and Isuzu Snuggle In South America

[NINETY_EIGHT_REGENCY]

GM and Isuzu Snuggle In South America
Evelyn M. Rusli, 08.29.07, 12:00 PM ET


General Motors may have sold its equity stake in Isuzu Motors last year, but the U.S. truck maker has yet to sever ties with its Japanese peer. On Wednesday, the automakers announced that they have strengthened their strategic alliance in South America to sell trucks in the economically hot region.

In a joint statement, cited by Reuters, the companies said they have signed an agreement that reinforces their existing partnership to sell trucks in Colombia, Ecuador and Venezuela. The companies will work together to launch new truck models, including the Isuzu N-series and F-series. GM and Isuzu could take the next step in their partnership if all goes well. According to the statement, the companies are conducting a feasibility study to determine whether a joint venture could be established by the end of this year.

Shares of GM were up 0.7%, or 21 cents, to $29.23 in Wednesday pre-market trading.

GM and Isuzu are cozying up in South America, as GM continues to struggle at home.

A weak housing market and high gasoline prices, has depressed consumer demand for GM's once-iconic trucks and cars. In June, the carmaker said it sold 320,658 cars and light trucks--a 21.3% drop from the 407,513 units it sold a year ago. (See: "General Motor****s A Speed Bump.") Meanwhile, GM's piece of the sales pie is dwindling--in North America sales slipped 7% in the first six months, while market share declined to 23% from 24.3% for the year ago period.

Deteriorating sales have hit every big Detroit player, forcing many to focus abroad. Indeed, through initiatives such as the one in South America, GM has done just that. In the second quarter, GM’s sales were particularly strong in Europe, where profits rose 65.0% to $236 million, from $143 million in the year ago period. Meanwhile, earnings jumped 44.5% in Asia Pacific, and 37.4% in the Latin America, Africa and Middle East bloc. (See: "GM Burns The Street." )

The South American partnership also seems to fit in with Isuzu's larger plans. On Tuesday, Isuzu unveiled a three-year business plan which focuses on expanding sales overseas and fortifying strategic relationships with its peers. On Monday, the Japanese company said it was teaming up with its rival, Toyota (nyse: TM - news - people ), to go green, by developing environmentally friendly diesel technology. Isuzu will work with Hino Motors, a Toyota truck subsidiary, on the diesel technology and on a design for heavy-duty truck cabins.

forbes.com

[I-Love-Pontiac]

Oh yay. I can't wait till we get even more Japanese Hummers.