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Tokyo, Nov 7: The move comes as auto makers around the world race to come up with advanced technology to meet ever-tighter standards for emissions and fuel economy, with many forming operational alliances to sharpen their competitive edge. It also marks a recognition by Toyota, which has been trying to steer the industry towards gasoline-electric hybrids, that it urgently needs a broader line-up of diesel cars as consumers seek to get more mileage out of expensive fuel. Diesel cars are typically 20 to 30% more fuel-efficient than gasoline cars, although they emit more harmful nitrogen oxide and particulate matter.
Rival Honda Motor Co earlier this year announced plans to beef up its work on diesels, betting on growth in North America, Japan and other markets where they still occupy a niche.
“We consider hybrid technology as one effective solution, but in light of the varying regulations and energy policies in different countries, as well as the proliferation of fuel sources, we need stepped-up efforts in the diesel field,” Toyota president Katsuaki Watanabe said. “That’s why we approached Isuzu with this proposition,” he told a joint news conference in Tokyo.
The latest step marks Toyota’s second capital link-up with a Japanese auto maker in 13 months. In October 2005, it took 8.7% of Fuji Heavy Industries Ltd, the maker of Subaru cars. Both Fuji Heavy and diesel-savvy Isuzu, a 69-year-old truck maker valued at $4.0 billion, were formerly affiliated with US auto giant General Motors Corp, which had dissolved those ties to raise much-needed cash.
Toyota, the world’s No 2 auto maker, will buy 60 million shares in Tokyo-based Isuzu from Mitsubishi Corp and 40 m from Itochu Corp, for 440 yen a share.
—Reuters
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