VW and Isuzu Denies Deal Talks

There have been rumors that VW will be purchasing a stake in Isuzu, via VW's heavy duty trucks brand MAN. The rumor first surfaced in a report by German magazine Manager Magazin. However Isuzu have quickly denied existence of such talks.


In response to the rumor, Isuzu said in a press statement "There was a report concerning plans for our stock to be acquired by another company, but there is no truth to that."

VW did not respond to the press but German industry analysts denied credibility of the rumor, citing VW's not so good experience with Suzuki. Insiders have mentioned that VW is increasingly frustrated with intricacies of the consensus seeking Japanese management culture. To date, very little progress have emerged from VW's highly publicized deal with Suzuki. March this year, VW Group's CEO Dr. Martin Winterkorn revealed that the VW Group has hit some snags in its long term goal of overtaking Toyota due to the slow progress of its small car development programs with Suzuki. Dr. Martin Winterkorn said, “We here in the western world are sometimes more decisive . . . the Japanese culture of achieving consensus is difficult. But I can promise that the co-operation will improve.” So it is unlikely that VW will be speaking to another Japanese partner anytime soon.

Like most merger deals, we have always suspected financial institutions to be the ones releasing these so called "insider news" to push stocks. Of course this is illegal but it is difficult to prove. Afterall, aren't all stocks purchase speculative?

Update from Reuters : What is being discussed is an engine supply deal and not equity stakes. "Isuzu would supply seven-litre-class diesel engines for midsize trucks and three-litre-class diesel engines for commercial vans and small trucks produced by the Volkswagen group.

In return, Volkswagen will supply engine control and body safety technologies used in its passenger cars for Isuzu's next generation pickup trucks"


Isuzu is the oldest vehicle manufacturer in Japan, since 1916 when the company was created as a joint venture by Tokyo Ishikawajima Shipbuilding and Engineering Co. and Tokyo Gas and Electric Industrial Co. to manufacture rebadged British Wolseley CP trucks. Today, Isuzu is one of the largest heavy duty vehicles and diesel engine manufacturers in the world. Isuzu makes light to heavy duty trucks, buses, pick-up trucks and industrial diesel engines. Its core markets are in Asia-Pacific, Ocenia, Middle East and Africa. The company is among the top selling, if not the market leader in pick-up trucks and light-heavy duty vehicles.


MAN meanwhile, is short for Maschinenfabrik Augsburg. The company has over 250 years of involvement in heavy industries. Most people know that Rudolph Diesel invented the diesel engine, but what most people don't realize is that Herr Rudolph Diesel's invention was only possible with support from MAN, thus making MAN builder of the world's first diesel engine. Today, MAN manufactures heavy trucks, buses, marine and industrial diesel engines and even power plants. MAN doesn't dominate the vehicles market like Isuzu but they are involved in a wider range of industrial applications. MAN's core market is in Europe, where MAN trails behind Daimler trucks, and in South America. In Brazil, MAN is the No.1 heavy vehicles brand. MAN was acquired by VW Group in 2006.