8 September 1997

Japan's Isuzu Motors Ltd said that it is negotiating with several automakers at home and abroad to sell fuel-efficient, low-emission diesel engines to be manufactured at its plant in Poland. Japanese media reported that Japanese automakers Honda Motor Co Ltd and Suzuki Motor Corp were likely to purchase the engines. These reports, however, have been not yet confirmed by Honda and Suzuki.

Isuzu declined to confirm the names of the automakers. "We are trying to sell diesel engines to be produced in our Polish factory from June 1999, but we cannot disclose the names of the automakers we are negotiating with. They include Japanese automakers as well as those producing cars in Europe'' an Isuzu spokesman said.

The Japanese daily Nihon Keizai Shimbun reported that Honda would buy 20,000 engines a year with capacities between 1,500 cc and 1,700 cc to be made at Isuzu's Polish plant. The engines would be used in Honda cars assembled in Europe after 2001. In Europe, Honda has since 1996 been buying diesel engines from Rover Group, the British car unit of Bayerische Motoren-Werke AG (BMW) (BMWG.F), for its larger British-made cars. Honda plans to expand annual production capacity at its plant in Britain to 150,000 vehicles by the end of 1998 from 100,000 at present, and plans to build a new plant in continental Europe after 2001, the newspaper said.

Isuzu, which is 37.4% owned by General Motors Corp , said in July that it and GM are considering transferring GM's diesel engine development and production to Isuzu. Isuzu said at that time that the two companies had agreed that Isuzu would produce 1,700 cc diesel engines at the Polish factory for GM affiliate Adam Opel AG, starting in 2000. Isuzu also said at that time that it would boost its global production of diesel engines to 1.8 million units a year by 2005 from a current 800,000 units. This would make Isuzu the top manufacturer of diesel engines, surpassing current leader PSA (Peugeot Citroen Automobiles) output of one million units per year.

Source: Reuters