Volkswagen And Isuzu Are At It Again
When the first rumors of a possible tie-up between Volkswagen and Isuzu were floating around, they were vigorously denied by Isuzu, and meekly (“currently not on the agenda”) denied by Volkswagen. Here they are again. The Nikkei [sub] writes without the usual qualifications that „Isuzu Motors Ltd. and Volkswagen AG have begun negotiating a tie-up involving the mutual supply of truck engines and related technologies, a move that could create a formidable force in emerging markets.”
According to the report, if that engine deal progresses well, “they will also consider acquiring stakes in each other.”
The Nikkei heard that “Isuzu would supply midsize diesel engines to Volkswagen, while the German automaker would provide advanced technologies to the Japanese partner. They would also begin joint procurement of engine components.”
When they say midsize, they are talking truck engines, a 7-liter-class diesel engine for commercial vehicles produced by Volkswagen group firms, such as MAN SE.
Toyota still holds a 5.9 percent stake in Isuzu.
Martin Winterkorn and Mr Piëch deserve the squillions they are earning at VW AG. They have continued to invest heavily throughout the recession and cemented deals which long-term could pay off handsomely. Barring an unlikely misstep in execution (US market), they'll reach their stated goal of No 1 in global sales, and likely with a decent profit margin. Ford should be taking note. They jettisoned JLR after having bankrolled the development of its most competitive and attractive ranges ever, keeping Lincoln as their 'luxury' brand just as global sales of luxury vehicles started exloding. Lincoln, limited to a recession-hit US market, slowly withers on the vine for lack of unique products and/or lack of sufficient technical and content differentiation from their Ford cousins.
The No. 1 & 2 manufacturers of small displacement diesels are getting into bed together. Everyone else should get very nervous. I wonder what that would do for the Duramax line?