Isuzu And VW Had Been Flirting For Over A Year

Bertel Schmitt
by Bertel Schmitt

“We have been in contact with Volkswagen for a year and a half,” an Isuzu executive told The Nikkei [sub]. This after rumors of a possible tie-up between Volkswagen and Isuzu at first had been vigorously denied and then spun into an engine deal. We didn’t believe it.

The Nikkei now writes that a capital tie-up is under discussion. The two hope to reach a basic agreement around autumn. Allegedly, Isuzu has no intention of giving up its independence.

“We have enough strength to consistently earn annual operating profits of 100 billion yen,” an Isuzu official says. That would be $1.2 billion. Toyota is another unknown. They hold a 5.9 percent interest in Isuzu. Depending on how much Toyota makes out of that interest, possibly Toyota could sell to Volkswagen if the price is right.

Toyota is facing a severe production drop this year. “Toyota’s output in the current fiscal year will drop by 1.5 million units to 2 million units,” Kohei Takahashi, an analyst at JPMorgan Securities Japan Co., said. This will leave deep marks on Toyota’s numbers. Under these circumstances, anything is possible.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • UnclePete UnclePete on Apr 24, 2011

    All I have to say is: Joe Isuzu commercials - best car commercials ever. As far as the important part of the article, the business angle, I am interested to see how this all plays out.

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