According to the Reuters news agency, Nissan Diesel Motor and major shareholder Nissan Motor said on Monday they would jointly develop light trucks in a move that ends alliance talks between Nissan Motor and Isuzu Motors Ltd.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Nissan Motor had been looking for a partner to expand its operations in the high-profit market for light-duty commercial trucks — part of an aggressive product offensive aimed at boosting its already strong profits, Reuters noted.
The automaker had been discussing an alliance with Isuzu Motors, which currently supplies it with “Elf” two-tonne trucks, but said last month that those talks had hit a snag and that negotiations had begun with affiliate Nissan Diesel, the report said.
Under the agreement, Reuters said, the two firms will set up a joint venture late this year to develop trucks with a payload of 1.0-2.0 tons. The company, to be capitalised at 15 billion yen ($US129.7 million), will be owned 85% by Nissan Motor and the rest by its affiliate.
Andy Palmer, Nissan Motor’s programme director for light commercial vehicles, told a news conference attended by Reuters that the tie-up would enable the automaker to competitively develop, build and market light-duty trucks worldwide.
He reportedly said the alliance would help the partners take advantage of a fast-growing segment, which he estimated would grow to around 1.8 million units over the next few years from about 1.4 million units last year.
The joint venture aims to produce 60,000 units a year globally, starting in 2006 or 2007, with 16,000 of that in Japan, Reuters added.
“We see the small trucks segment as one that has big potential to grow, especially in China,” Palmer reportedly said.
Reuters noted that debt-ridden Nissan Diesel is expected to benefit from lower development costs and a much-needed steady source of profits. The truckmaker, one of Japan’s weakest, has been hurt by years of falling truck sales at home and huge interest-bearing debts left over from the bubble economy years.
Reuters added that the company on Monday posted a group net loss of 3.35 billion yen ($US29 million) for the business year that ended in March, compared with a profit of 610 million yen a year earlier and in line with a forecast issued last month.
For the current year, however, it forecast a net profit of two billion yen on a 10% rise in sales to 420 billion yen, helped by robust domestic sales and continued growth overseas, Reuters noted.
According to the news agency, the new joint venture will produce the light-duty trucks for sale in Japan at Nissan Diesel’s Ageo plant.
The partners have yet to decide on overseas production sites. But Palmer said cooperation with Nissan Motor’s Chinese partner, Dongfeng Motor Corp, was an option for that market, adding the joint venture was unlikely to build any new plant sites, the Reuters report said.
A Nissan Motor spokesman told Reuters that Renault was not seen having any role in the venture for now.
