TOKYO (Thomson Financial) - Japanese truckmaker Isuzu Motors Ltd. said on Monday it is studying a plan to start making trucks in Saudi Arabia as one of several possible ways to accelerate its sales expansion in the Middle Eastern market.
The company has begun discussing the option with the Saudi Arabian government and car dealers, without any time frame set, an Isuzu spokesman said.
Toyota Motor Corp., which holds a 5.9 percent stake in Isuzu, is not part of this project, he said. Toyota plans to respond to growing demand for its cars in Saudi Arabia with exports from its factories in Japan and closer sites such as Thailand, a spokeswoman at Toyota said.
The Isuzu spokesman rejected the report published earlier on Monday by the Nikkei business daily that Isuzu is set to start the production of midsize and large trucks in Saudi Arabia early next year at an annual rate of between 2,000 and 3,000 units, before increasing it to around 30,000 units at an unspecified time in the future.
The Nikkei report said Isuzu is likely to form a joint venture with local companies, including car dealers, and build what would be the first Middle Eastern car plant of a Japanese company, with a total investment of as much as 5 billion yen ($48 million).
Isuzu sold 33,900 vehicles, including 24,000 pickup trucks and 9,900 full-size trucks, in Saudi Arabia in 2006, up 45 percent from 2005 and more than double its sales in 2004.
The company currently exports the D-MAX pickup truck, its best-selling model in Saudi Arabia, from its plant in Thailand, while all the full-size Isuzu trucks exported to the Middle Eastern kingdom are made in Japan.
Toyota plans to sell 510,000 cars, mainly commercial vehicles, in the Middle East and the Near East in 2008, up 6 percent from last year.
On the Tokyo Stock Exchange, Isuzu shares rose 2.2 percent to 520 yen each in the morning session, with Toyota up 4.1 percent at 5,320 yen. The benchmark Nikkei 225 Stock Average was up 1.6 percent at 13,697.69, led by exporters on the back of a softer yen.
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