Nissan Diesel Gets Off The Bus With Fuji Heavy

TOKYO, Jan 16 (Reuters) - Japanese truck maker Nissan Diesel Motor Co Ltd said on Wednesday it would end cooperation with Fuji Heavy Industries Ltd on bus platforms, further speeding the realignment of Japan's troubled bus industry.

The debt-ridden truck maker currently produces bus platforms for use by Fuji Heavy and unlisted Nishi-Nippon Shatai Kogyo Co to assemble bus bodies.

It said in a statement that it would end its ties with Fuji Heavy, 20 percent owned by General Motors Corp , by the business year beginning in April 2003.

Nissan Diesel, owned 22.5 percent each by Nissan Motor Co Ltd and Renault SA , said that from 2003/04 it would consolidate all bus assembly work at Nishi-Nippon Shatai Kogyo Co, a Fukuoka-based subsidiary of Nishi-Nippon Railroad Co Ltd .

``In the midst of the continuing slump in demand for domestic buses, the streamlining of our bus body operations has become an urgent matter,'' Nissan Diesel said in a statement.

``By consolidating the bus assembly work with Nishi-Nippon Shatai...we think we will be able to boost our competitive power in the market.''

Nissan Diesel said at a news conference that it was aiming to to have its loss-making bus operations in the black in 2003/04.

Fuji Heavy, which broke away from an affiliation with Nissan when it came under the umbrella of GM, said in a statement that its results would be unaffected by the move.

Fuji Heavy, the maker of Subaru brand vehicles, also does bus assembly work for fellow GM affiliate Isuzu Motors Ltd .

Nissan Diesel's move follows an announcement earlier this month by Isuzu and Toyota Motor Corp affiliate Hino Motors Ltd that they would merge their bus-making operations by October 2003 as they battle overcapacity in the shrinking domestic market.

Shares in Nissan Diesel rose 2.44 percent or two yen on the announcement to close Wednesday trading at 84 yen, while Fuji Heavy ended up 3.9 percent at 613 yen, after it forecast a 1.6 percent rise in 2002 global sales on Tuesday.

Both outperformed a 0.30 percent drop in the benchmark Nikkei average .