GM, Isuzu to step up cooperation in South America

TOKYO (Reuters) - General Motors Corp GM.N and Japan's Isuzu Motors Ltd (7202.T) said on Wednesday they would work together more closely in South America, possibly through a joint venture, to boost truck sales in the fast-growing region.

The two companies, which dissolved their 35-year equity alliance last year, said in a statement they had signed a basic agreement to reinforce an existing operational partnership to expand sales of Chevrolet-badged Isuzu trucks in Colombia, Venezuela and Ecuador.

In 2006, GM sold 14,580 Isuzu trucks to capture 24.7 percent of the Andean market for commercial vehicles, which has more than doubled since 2003. The partners plan to further increase sales and market share, partly by launching the new Isuzu N-series and F-series trucks, they said.

A feasibility study regarding the establishment of a joint venture would be completed by the end of this year.

Strapped for cash, GM sold its 7.9 percent stake in Isuzu last year but had said its strategic partnership with the truck maker would likely strengthen as it seeks to expand in developing countries.

Isuzu on Tuesday announced a new three-year business plan aimed at boosting sales and profits through an expansion overseas and stepped-up cooperation with other automakers.

Isuzu's shares bucked a sharp drop in other auto stocks and the broader market with a 4.4 percent rise to 598 yen on Wednesday.