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Isuzu News

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News Isuzu CEO says North American operations nearing a 'major turning point' JAMES B. TREECE | Automotive News Posted Date: 11/23/05 TOKYO -- Isuzu Motors Ltd.'s profits are down, but CEO Yoshinori Ida isn't worried. He says the decline is part of his plan to refocus the company on the more profitable parts of its business. For example, Isuzu's North American revenue shrank 31 percent in the fiscal first half, which ended Sept. 30, to $604.1 million, the company reported last week. That was mostly because Isuzu stopped selling SUVs. But operating profit there surged two and a half times, to 3.74 billion yen, or $33.1 million at current exchange rates, from $13.2 million a year earlier. The results show that Isuzu's North American diesel operations are doing better than its SUV business used to do. 3 areas of change The six months opened Isuzu's latest three-year restructuring plan, and Ida portrayed the results as a solid start. "This year will be a major turning point for us," he said. He cited three areas of change at Isuzu: 1. Product development efforts are paying off. Isuzu has introduced several products in Japan so far in 2005. More will come next year. 2. Investments in overseas operations are remaking Isuzu. Isuzu used to be a maker of SUVs and other trucks that it exported from Japan. Now it is a commercial-vehicle and diesel-engine company with a global base. It has diesel plants in Europe and the United States and an expanded factory complex in Thailand. It has bought several of its overseas sales arms. As part of that shift, Isuzu's vehicle business increasingly is centered on Japan, Southeast Asia and China. Revenue from Southeast Asia was nearly three times larger than North American revenue in the latest six months. 3. Restructuring efforts are beginning to pay off. Ida predicts those changes will become more apparent over the next three years. Indeed, profits fell because of higher capital spending and larger outlays for r&d, plus the cost of closing a factory in Kawasaki, Japan. Total operating profit fell 12.9 percent to $334.6 million in the latest six months. Net income fell 27.4 percent to $229.9 million. Revenue rose 0.3 percent to $6.51 billion. Sales collapsed For the full year, Isuzu forecasts a slight gain in revenues and operating profits, but it predicts a drop in net profits. Isuzu's light-vehicle sales in the United States collapsed 55.8 percent to 10,600 in the first 10 months of 2005. But for the full calendar year Isuzu predicts a 3.6 percent rise in North American vehicle sales from 2004. Much of the gain will be from medium-duty commercial trucks.

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