Toyota Officially Ends Partnership With Isuzu To Develop Diesels

Industry News

Can’t imagine why.

It turns out Toyota and fellow Japanese automaker Isuzu inked a deal back in 2006 to jointly develop a 1.6-liter diesel engine and even build a factory together. Isuzu, which left the US market also back in 2006, also agreed as part of the deal to sell Toyota a 5.89 percent stake in the company. Production for that diesel was slated to begin in 2012. It never happened. According to Nikkei Asian Review, the two automakers officially announced the end of this partnership late last week. The main reason?

Nobody wants diesels anymore, plain and simple. Both sides claim market forces dictated the final decision, which is exactly right. Toyota has already announced massive plans to electrify its future lineup as well as further advancements in hydrogen fuel cell technology.

As part of the business divorce, Isuzu will buy back its shares from Toyota for around $720 million. Isuzu also realized, according to one of its senior executives, that the project with Toyota was simply no longer worth the capital relationship. However, both companies say they’ll continue working together on other “core technologies.” Back in the 1990s, Isuzu was doing fairly well in the US market thanks to its popular SUVs, the Rodeo and Trooper. It even attempted a Jeep Wrangler competitor, called the Amigo.

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And then PR disaster struck: the Trooper became embroiled in a rollover controversy following a “Not Acceptable” rating from Consumer Reports which alleged the top-heavy SUV was prone to roll over in certain driving conditions. Consumer Reports’ claims were enough to permanently damage Trooper sales and it hurt Isuzu’s image as a whole. Isuzu also worked with GM off and on for many years. Today, Isuzu remains popular in several Asian markets for its trucks and as an engine supplier.

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