Isuzu Motors May Delay Closing Truck Plant

- NEW YORK March 26, 2003; Dow Jones reported that Isuzu Motors Ltd. is considering putting off an earlier plan to shut down a main factory in Kawasaki, Kanagawa Prefecture, by the end of February 2004 as its trucks are in good demand, the Kyodo news agency reported Sunday, citing company sources.

The Tokyo-based maker of trucks and specialty vehicles, in the throes of corporate rehabilitation, is experiencing strong exports to Asia as well as a rise in replacement demand domestically for more environment-friendly trucks as Tokyo and other local governments are to tighten control on exhaust emissions from this October.

Isuzu, partially owned by General Motors Corp. (GM), boosted its vehicles sales in the domestic market by about 30% in February from a year earlier, marking the fourth monthly consecutive rise. The Kawasaki factory has been running at full capacity, Kyodo reported, citing the sources.

In May 2001, in the face of sluggish business, Isuzu came up with a plan to relocate the firm's heavy-duty truck production functions at the Kawasaki plant to its three other plants in the country.

Until last August, the truck maker had also said it would relocate about 1,500 employees working at the factory to other factories, Kyodo said.

Through these and other changes, Isuzu was hoping to boost capacity utilization of its factories in Japan to 90% from 50-60% in the past.

Some officials in the truck industry expect demand to continue rising for the next two years or so because the central government is also envisaging stricter controls on exhaust gas emissions, Kyodo said.

The sources at Isuzu said the company will decide later to what extent it will delay the closing of the factory, based on order placement and inventory projections.