Isuzu Motors is considering assembling trucks in Ukraine in an effort to develop new overseas markets, which could lead to the establishment of the first production base set up by a Japanese truck manufacturer in that region of the former Soviet Union, Dow Jones reported.

The news agency said the potential move reflects Isuzu's efforts to develop new overseas markets with high growth potential such as Russia, Eastern Europe and India, as well as the Middle East, as it expects the Japanese truck market to shrink once the current domestic demand for more environmentally friendly diesel engines fades.

General Motors affiliate Isuzu is considering assembling small and mid-size trucks in Ukraine with a local bus maker, Holding Bogdan, with which Isuzu in 1999 formed a tie to supply parts for buses, Dow Jones said.

An Isuzu spokesman reportedly said the Japanese truck maker is now considering exporting truck parts to Holding Bogdan, for local assembly.

Dow Jones said Isuzu currently has overseas production bases in China, Thailand, Indonesia and the Philippines.

The news agency said the Nihon Keizai Shimbun newspaper reported in a Tuesday edition that Isuzu will start exporting parts for small and midsize trucks to Holding Bogdan as early as spring, and predicts sales of 1,000 trucks in the first year.

But Dow Jones said the Isuzu spokesman denied the report, saying nothing specific has been decided.