Nissan Developing Own Small Truck?

TOKYO April 23, 203; Dow Jones reportesd that Nissan Diesel Motor Co. said today it and Nissan Motor Co. are considering developing and manufacturing small trucks themselves and ending their purchasing contracts with Isuzu Motors Ltd.

No decision has been reached yet, but developing trucks independently is one option for the Nissan group as Japanese makers prepare to meet tighter diesel emission requirements from 2005, a Nissan Diesel official said.

Nissan Diesel and Nissan Motor have purchased small trucks weighing around two tons from Isuzu since 1995. Isuzu has supplied some 4,000 small trucks a year to the Nissan group on an original-equipment-manufacturer basis since then. Nissan Diesel bought about 3,200 Isuzu-made small trucks in the year ended March 31, while Nissan Motor purchased some 850 units in the same period.

A decision by the two firms to end ties with Isuzu would mark another setback for the struggling General Motors Corp. affiliate. Isuzu is 49%-owned by GM of the U.S.

The Nihon Keizai Shimbun reported Thursday Nissan Motor and Nissan Diesel will split investment for independent development of trucks to be sold as early as 2006.

The news lifted Nissan Diesel's shares on the Tokyo Stock Exchange while pressuring Isuzu's. Nissan Diesel surged 13.4% to Y161 by midday, while Isuzu was down 3.1% at Y95.

Such a joint development would signal a growing commitment by Nissan Motor's to assist Nissan Diesel's earnings recovery. Joint development would also benefit Nissan Motor which is aiming to achieve annual car and commercial vehicle sales of 550,000 units via a Chinese joint venture by 2006.

Nissan Motor and its top shareholder Renault each have a 22.5% stake in Nissan Diesel. A former Nissan executive became Nissan Diesel's president last year, but as yet the two companies haven't announced any major cooperative plans in new product development and production.