Japanese truckmaker Isuzu Motors Ltd and Volkswagen AG are considering an operational tie-up in areas such as truck engines, but have no immediate plans for capital ties, a top Isuzu executive said.
"We're looking at cooperation in engines and other areas but nothing has been decided yet," the executive, who spoke on condition of anonymity, told Reuters on Tuesday.
While the two companies were not discussing any capital ties now, that was a possibility in future if cooperation deals evolve, the executive added.
A spokeswoman for Volkswagen confirmed Europe's biggest carmaker is in talks with Isuzu over a possible cooperation on parts, but declined to be more specific.
Volkswagen Chief Financial Officer Hans Dieter Poetsch has said several times in recent weeks that taking a stake in Isuzu is not on the agenda, but that the company was looking for opportunities for cooperation, echoing comments from Isuzu.
Media reports have said Isuzu and Volkswagen were aiming to close an operational deal this autumn and that VW was looking to take a stake in Isuzu.
Separately, VW is pushing ahead with a plan to combine its truckmaking affiliates MAN and Scania by making a cash bid to increase its stake in MAN.
VW Chairman Ferdinand Piech is seeking to create Europe's biggest truckmaker to compete better with world leader Daimler AG and number two Volvo.
Isuzu, Japan's top maker of small trucks, could not immediately be reached for comment. President Susumu Hosoi is scheduled to hold a news conference at 0830 GMT in Tokyo on Wednesday to announce Isuzu's financial results for the year.
Isuzu has been looking to strengthen its mid-sized and large-sized truck business, and has been looking for a strategic partner to replace long-time shareholder General Motors Co to help develop its next generation of pickup trucks, which require expertise in passenger cars and big investments.
Volkswagen, meanwhile, is looking for a strong truck presence in Asia, which is dominated by Japanese brands.
"Isuzu and Volkswagen would be able to make up for each other's shortcomings, and looking around at the world's automakers, it would be a good combination," the source said.
Isuzu, which ended a 35-year capital partnership with cash-strapped GM in 2006, is now 5.9 percent owned by Toyota Motor Corp. But the two have cancelled a project to co-develop diesel engines and Isuzu is now alone among Japan's four truckmakers in not having a strategic capital alliance.-in.reuters.com
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