Isuzu Motors has shelved a plan to build a new manufacturing plant in North America in the wake of the US sub-prime loan turmoil, Isuzu president Susumu Hosoi was quoted as saying.

''The US market is expected to stay in the doldrums and we cannot foresee a certain volume'' of sales there, Hosoi told Kyodo News.

Isuzu would check whether the sub-prime crisis would have spill-lover effects worldwide, he reportedly added.

Kyodo News said Isuzu's medium-term business plan from fiscal 2008 initially called for building a new plant in North America as a step toward reinforcing its overseas operations.

He also hinted that the project to develop environmentally friendly diesel engines with Toyota could produce engines for larger cars on top of the 1.6-litre units already agreed.

He added that Isuzu and General Motors would continue cooperation in such areas as production of diesel engines in the United States and Europe despite the severance of capital ties, Kyodo said.