 Many US carmakers are finding trading conditions tough |
General Motors (GM), the loss-making US car firm, is in talks to sell its commercial truck divisions in Australia and South Africa to Japan's Isuzu. Shares of Isuzu, which makes SUVs and utility vehicles, climbed as much as 5% on the news.
GM is seeking to cut costs and boost revenues as its earnings come under pressure and it loses ground to rivals.
Isuzu will reportedly buy GM's 40% stake in its Australian firm and a major share of the South African unit.
Isuzu is 8% owned by GM and said it wants to increase its role as the main large vehicle-maker of the US firm.
Bigger slice
There also was speculation in the Nihon Keizai newspaper that Isuzu will look to increase its share of GM's US diesel engine operations.
According to the paper, Isuzu will buy GM's 40% stake in Isuzu-General Motors Australia, and take a majority stake in a new large vehicle and commercial truck unit that will be spun off from GM in South Africa.
No figures were available and a spokesman for Isuzu said that the companies still had to finalise details.
Analysts said that it was in the interests of the US company to give Isuzu greater control over the commercial truck divisions.
Isuzu has been boosting profits and wants to move production abroad to cut costs, while GM is looking at ways of raising cash to fund its core car business.
"For GM, which has to pursue selectively and focus to transform its earnings structure, the passenger vehicle operations are the heart of the company and the ones it has to keep," said Noriyuki Matsushima, an analyst at Nikko Citigroup.
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