UPDATE 1-Isuzu says may build trucks in Saudi Arabia

(Recasts with company comment)

TOKYO, April 21 (Reuters) - Japanese truck maker Isuzu Motors Ltd (7202.T: Quote, Profile, Research, Stock Buzz) said on Monday it was looking at building trucks in Saudi Arabia, which would make it the world's first auto maker to produce vehicles there.

Construction and thus truck demand has been rising in Saudi Arabia, where the economy has benefited from a fivefold surge in oil prices over the last six years.

"We are talking with a local company," said Isuzu spokesman Tadashi Ioka.

"When entering a new market, we often first outsource production to a partner, but a joint venture is also an option," he said.

Isuzu will build the midsize to large trucks from knock-down kits, where the parts of chassis, engines and other large components are exported from Japan, the Nikkei business daily reported.

Production could start early next year, and inital annual output is slated at about 2,000 to 3,000 units, the paper said.

Isuzu, which is 6 percent-owned by Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz), exported 33,900 pick-up trucks and trucks to Saudi Arabia in 2006, up 46 percent from a year earlier. Some 9,900 of those were trucks. (Reporting by Edwina Gibbs; Editing by Hugh Lawson)