Toyota announced today that it will spend $373 million on a deal with Isuzu that will transfer 5.9 of the truck- and diesel-maker to the giant Japanese automaker. Toyota's goal in purchasing a stake in Isuzu is to bolster its diesel portfolio, which apparently lags behind other major automakers like cross-town rival Honda who announced in September it would have diesel-powered passenger cars for sale in the U.S. within three years.
We always expected that Toyota would rely on its own Hino Motors commercial truck subsidiary for a diesel engine to power a heavy-duty version of its new Tundra pickup, but Hino is not prepared to make smaller diesel engines for passenger cars and potentially diesel hybrids. Isuzu offers Toyota the know-how and production capacity for diesel engines that are smaller than 2.5-liters, which makes the purchase seem like a perfect fit.
Mitsubishi will now become the largest single shareholder in Isuzu with 9.7 of the stock, followed by trading house Itochu Corp. with 7.2 and Toyota with 5.9. GM sold all of its stock in Isuzu back in April, which amounted to 7.9. Today's announcement marks the second time Toyota has swooped in and
picked up shares in a company that GM has cast off, the first being Fuji Heavy Industries, the parent company of Subaru.
[Source: Automotive News ndash; sub. required]
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