Isuzu is a world-renowned manufacturer of heavy trucks, buses and light commercial vehicles, but its passenger car business is long defunct. Its history is a complex tale of multiple alliances, one successful for a time, but all ending ultimately in failure.
Isuzu is the unlikely holder of one notable record, as manufacturer of the first passenger car built in Japan. That car was the Wolseley A9, produced from 1922 under a licencing agreement between the British firm and Ishikawajima Automotive Works, the company that would ultimately become Isuzu Motors.
Vehicle production was seriously disrupted during World War II but resumed in 1945. A contract to supply light trucks to the occupying American Army allowed the company to rebuild its business. It was renamed Isuzu Motors Ltd in 1949. Car production resumed in 1953 with a version of the Hillman Minx, built under licence from the Rootes Group.
In 1961, Isuzu introduced its first in-house designed model, the Bellel. This was an attractive looking medium-sized saloon, but was rather expensive, so did not sell well. It was followed by the smaller Bellett model in 1963, which replaced the Minx, and the larger Florian saloon in 1967.
Isuzu was very much a minor player in the fragmented Japanese passenger car industry and, in 1968, was pressured by the government into an alliance with Fuji Heavy Industries, manufacturers of Subaru cars. The alliance was not successful and was dissolved after barely two years. It was followed by even shorter-lived deals with Mitsubishi, then Nissan.
Finally, in September 1971, a more fruitful partnership deal was signed with General Motors, which took a 34% stake in Isuzu. This gave GM access to Isuzu light pick-up trucks, which were sold under the Chevrolet brand in the US. It also allowed Isuzu to partner with GM passenger car programmes, notably the 1973 T-car.
This simple but effective RWD architecture underpinned what was truly a world car. It sold mainly under the Chevrolet and Pontiac brands in the Americas, Opel and Vauxhall in Europe, Holden in Australia and Isuzu in Japan, the latter as the Gemini, launched in 1974. The Gemini was actually exported to the US from 1976, where it was sold, bizarrely, as the Buick Opel, even though it had no connection with Rüsselsheim!
Access to GM’s huge distribution network enabled Isuzu to export its vehicles in serious volumes for the first time. Between 1973 and 1976, Isuzu’s production quadrupled and exports rose from virtually nothing to 35% of total production. This initial period of expansion, however, would be short-lived.
Isuzu exports to the US were sold initially as GM branded products and, from 1981, under its own name, which involved setting up an independent dealer network. This move followed three years of declining sales. Recognising the superior quality and reliability of Japanese cars, consumers were buying Toyota, Nissan and Honda models in increasing numbers, but seemed to either ignore or be unaware of the Japanese origins of GM-badged Isuzu models.
The relationship between GM and Isuzu was also deteriorating. GM Chief Executive Officer, Roger Smith, told Isuzu Chairman Toshio Okamoto in 1981 that Isuzu was no longer regarded by GM as a favoured global partner. To add insult to injury, Smith asked Okamoto to assist GM in negotiating the purchase of a stake in Honda. Needless to remark, Honda rebuffed GM’s advances, no doubt having been made aware of the manner in which the US giant had behaved towards Isuzu.
Despite this setback, the relationship continued to develop, underpinned by GM’s shareholding. In 1981 GM and Isuzu partnered with Suzuki to develop a small car and assemble and sell Isuzu and Suzuki commercial vehicles in Europe under the Bedford name. Isuzu and Suzuki exchanged shares and GM took a 5% stake in Suzuki to seal the deal. Isuzu was by now a major supplier of diesel engines to GM. From 1989, Isuzu’s Gemini and Impulse models were sold in the US under GM’s newly established Geo division, which marketed a rather rag-tag collection of rebranded vehicles from different Japanese manufacturers.
Isuzu continued to struggle in the US, hampered by the high value of the Yen making its exports from Japan uncompetitive. To counter this, it formed a partnership with Subaru in 1987 to build a US factory in Lafayette, Indiana, which was completed and in operation two years later.
In the early 1990’s, GM became increasingly concerned about Isuzu’s losses and the declining value of its shareholding. When the Japanese company asked for help in 1992, GM insisted that one of its executives, Donald T. Sullivan, be appointed to the Isuzu board as Executive Vice President of Operations. The appointment of a foreigner who did not speak Japanese to the board of a major Japanese company was without precedent.
Sullivan, an expert in strategic planning, began a major rationalisation of Isuzu’s business and product lines, stripping out overlapping light commercial models that were cannibalizing each other’s sales, reducing capital budgets and laying off temporary staff. He stopped short of making permanent staff redundant, a move that would have been fiercely resisted by the company.
Sullivan’s actions helped stem losses in 1993 and 1994, but the company still carried a very heavy debt burden of almost $7.5Bn. Sullivan concluded that Isuzu could never be a viable player in the passenger car business and should instead concentrate on manufacturing commercial vehicles and supplying diesel engines to GM.
Recognising that its domestic passenger car offering was weak and incomplete, Isuzu entered into an agreement with Honda in 1993 whereby it would sell the Odyssey MPV and Domani and Accord saloons under the Isuzu name, while Honda would sell rebadged Rodeo and Trooper SUVs.
Such partnerships may have been expedient in the short term for plugging gaps in its range and increasing its reach, but Isuzu was always the weaker partner and was vulnerable to outliving its usefulness, as happened with its core partnership with GM. Moreover, potential customers were often confused by an incoherent range, comprising genuine Isuzu vehicles and obviously rebranded offerings from other manufacturers.
The GM stake, which was increased to 49% in 1998, was subsequently diluted by an Isuzu share issue to which GM did not subscribe, and was then sold off by GM in tranches, the last in April 2006.
Isuzu’s exports peaked in the mid 1990’s and declined thereafter as its range became increasingly dated and threadbare. Isuzu sold its stake in the Indiana plant to Subaru in December 2002 for a nominal $1, although the plant continued to produce Isuzu Rodeo and Axiom SUVs until July 2004. By January 2008, when the company announced its withdrawal from the US market, Isuzu sold only two models there, both rebadged GM SUVs.
Isuzu’s passenger car business faded away to nothing from the early 1990’s. In Part Two, we will recall the vehicles for which it is best remembered.