Toyota and Isuzu have come on terms to dissolve their capital tie-up; scope for further collaboration still on the cards in near future
Toyota and Isuzu formed a partnership nearly twelve years ago in order to develop and build diesel engines globally. At that time the deal made a whole lot of sense and Toyota even got green signal from the authoritative board to purchase 5.89 percent stakes in its Japanese counterpart.
Toyota and Isuzu have come on terms to dissolve their capital alliance on mutual consent. It includes Toyota selling back its entire stake in Isuzu in the near future. Despite the split, the two automobile manufacturers have strong intent to continue on their existing projects.
These related to basic technologies and developments, as well as a scope to further collaborate in the years to come. It is not difficult to judge the fate of this partnership as the writing was always on the wall due to changing market trends and scenarios forcing them to suspend some initially thought-out projects.
However, progress has been made in other projects they have had mutual co-operation at, and Toyota along with Isuzu are on the same page to “reexamine” the capital relationship based on the current business environment. Millennials are preferring more technology based cars and new mobility solutions.
Moreover, the interest in diesel engine equipped cars has been decreasing in global markets. Even in India, where mileage concerns used to make or break a product, petrol-powered cars are currently outnumbering the oil-burners and manufacturers are responding to that in quick succession.
The increasing trend of zero-emission vehicles has made Toyota and Isuzu to culminate the diesel project. Toyota will be focussing its efforts on developing next generation commercial vehicle technologies with Hino Motors as it forms a core part of its global business. Hino is partnering with Volkswagen commercial vehicle division for developing self-driving and electric powertrain techs.