GM, Isuzu, China automaker sign heavy-truck pact

SHANGHAI, Nov 15, 2002; Reuters reported that General Motors has signed a pact with its main Chinese partner and Japan's Isuzu Motors Ltd <7202.T> to explore the heavy truck business in an expanding mainland market, the U.S. and Chinese auto makers said on Friday.

GM played down Japanese newspaper reports the trio, including China's number three auto maker Shanghai Automotive Industry Corp (SAIC), were close to setting up a manufacturing venture, saying the partners were merely considering such a possibility for now.

An SAIC executive confirmed a pact had been signed but declined to elaborate.

Automakers such as Volvo and DaimlerChrysler are accelerating drives into China's market for heavy trucks, expected to blossom as Beijing steps up infrastructure construction and develops the impoverished western hinterland.

"We've signed a letter of intent to explore the opportunities, or the possibility for cooperation in heavy-duty trucks," said GM's spokeswoman Daphne Zheng in Shanghai.

"If you look at what China has been doing...that speaks for quite a lot of potential in the heavy-duty truck market. If there's an opportunity, we certainly want to capture that quickly," she told Reuters.

Japan's Mainichi Shimbun reported last week that Isuzu and SAIC would start turning out large trucks in China by 2004.

Isuzu planned to raise output in China to an annual 70,000 units by 2005 via a venture with SAIC, from 40,000 mid-sized trucks now made every year with two other mainland partners, the newspaper reported.

GM is the largest shareholder in embattled Isuzu, considered the weakest of Japan's four largest truck makers, which has said it will shift much of its focus to a Chinese market that president Yoshinori Ida calls its "last chance".

And GM, the world's largest auto maker, already has a large automaking venture with SAIC in Shanghai.