Isuzu Motors Ltd. and Volkswagen AG have come to a truck engine supply deal and confimed that there will be no equity tie-up being planned. The two firms are expected to sign a confidentiality agreement and begin full-scale talks. Isuzu has yet to either confirm or deny that these talks have started with Volkswagen with regards to cooperation in engine supply and technology. Isuzu pointed out that it will consider a range of options on operational cooperation. Isuzu will be supplying seven-liter-class diesel engines for midsize trucks; and three-liter-class diesel engines for commercial vans and small trucks built by the Volkswagen group.
Volkswagen is expected to supply engine control and body safety technologies that have been fitted in the passenger cars for the next generation pickup trucks by Isuzu. This exchange will help Volkswagen to reduce costs and cut prices, vital for raising market share in growing countries. With this tie-up, Volkswagen is able to compete better with segment leader Daimler AG.
