Isuzu is considering streamlining US production of sports utility vehicles at its US joint venture with Subaru maker Fuji Heavy Industries Ltd but no details have been decided, Reuters reported.

Reuters said Isuzu had responded to a report in the Nihon Keizai Shimbun newspaper that it would dissolve its SUV venture by the end of this year to focus on truck operations by putting out a statement saying Subaru-Isuzu Automotive Inc, the joint venture, is looking for ways to make production more efficient.

Referring to the newspaper report, Isuzu said nothing had been decided, Reuters added.

According to Reuters, the Japanese newspaper said the Indiana-based joint venture, 49% owned by Isuzu, would become a fully owned subsidiary of Fuji from which Isuzu would contract SUV supply.

A rebadged Isuzu-designed Rodeo SUV built at the JV plant has previously been supplied to Honda for sale in North America as the Passport.

Reuters said Fuji Heavy would accept shares held by Isuzu, or Isuzu might reduce capital, a move which would make the debt-laden truck maker the first Japanese vehicle maker to withdraw from directly controlled production of SUVs in the United States.

Reuters added that Isuzu would continue selling vehicles under its own brand name in the United States by buying 2.5-litre vehicles from its largest shareholder, General Motors.

Isuzu has reportedly already arranged to buy a rebadged GM product for a future North American SUV model as it phases out its ageing Japanese-designed Trooper which, ironically, was once built in Japan and rebadged for GM to sell in markets such as Europe, Australia and New Zealand.

For the US 2002 model year, Isuzu rolled out the Axiom SUV which combines the Rodeo platform and Trooper 3.5-litre V6 petrol engine with a restyled body and cabin to replace the Trooper.

According to Reuters, the Keizai Shimbun said Fuji Heavy has been running its US assembly lines at full capacity thanks to strong local sales of the Legacy while Isuzu SUV sales have slumped.

The Axiom has attracted little praise from US automotive writers almost overwhelmed with new SUVs to sample. For example, the respected car buyers’ guide website commented that the model  “…amounts to little more than a steroid-popping Rodeo wearing a tuxedo”.

The Indiana Subaru-Isuzu JV factory can build 200,000 vehicles a year.

Isuzu spokesman Chip Letzgus told Reuters the company was always looking for ways to make its operation more efficient but had no comment on what he called a speculative report.