Isuzu 2005 Annual Report Download - page 8

The Mid-term Business Plan calls for aggressive invest-
ment by the company as a strategic stepping stone to fu-
ture growth. We aim to establish a solid business base by
enhancing the product line with the development of global,
strategic products, reinforcing organizational capabilities
and strengths in each business sector by product and mar-
ket, and strengthening collaboration with General Motors
Corporation.
More specifically, the plan targets 20% product cost re-
duction through modularization, component integration,
and introduction of new products, selling strategic trucks to
capture the No. 1 position in Japan, strengthening world-
wide commercial vehicle distribution capability to achieve
annual overseas commercial vehicle sales of 300,000 units
by March 2008, and maximizing profit by integration of the
light-duty commercial vehicle (LCV) platform and the in-
troduction of derivative models. In addition, Isuzu plans to
extend its role as a key player in the General Motors Group
through joint development and manufacturing and actively
strengthening the collaborative relationship with GM.
With these key themes, Isuzu will strive to grow its cor-
porate value and fortify its basic strengths with the goal of
consolidating its competitive advantage.
The Mid-term Business Plan
The Mid-term Business Plan includes the following two main
elements:
Develop and introduce strategic products for global markets
O Develop strategic products.
O Reinforce cost structures.
O Strengthen collaboration with GM.
Reinforce business operations by product/market
O Strengthen the CV business in Japan.
O Realign and reinforce the CV sales organization in overseas markets.
O Maximize LCV operating income.
O Expand and sustain growth of the DE business.
Develop and introduce strategic products for
global markets
Plans to develop strategic products include the “Asian
Truck” in the heavy-duty segment targeted at the Chinese
and ASEAN markets, integrated products in the medium
and light-duty segments like the F-series and N-series trucks
that meet global market requirements, integrating the pick-
up truck platform to enjoy volume benefits by global de-
ployment, and a step-by-step program to convert the DE
range into super-clean diesel engines.
Taking advantage of the opportunities presented by new
product releases, Isuzu plans an extensive review of devel-
opment concepts and processes to maximize production
efficiency and reduce product cost by 20%.
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Isuzu Motors Limited Annual Report 2005
Isuzu is also committed to strengthening collaboration
with General Motors. As a key player of the GM group, Isuzu
has started strategic studies with GM with a view to expand-
ing Isuzu’s role in joint product development and manufac-
turing. This includes expanding Isuzu’s CV business and use
of Isuzu DE within the GM Group and joint development of
next-generation LCV models for the global market.
Reinforce business operations by product/market
Isuzu is eager to reinforce the CV business in Japan. In our
bid for the top spot in the Japanese CV market, we plan to
introduce new strategic products including a new engine with
superb fuel economy for the GIGA heavy-duty truck, and
new medium and light-duty truck models built on integrat-
ed modules. Isuzu aims to capture 30% of the heavy-duty
truck market and 40% of the light-duty truck market with
renewed marketing efforts in weaker segments and regions.
Realigning and reinforcing the CV sales organization in
overseas markets requires restructuring the distribution func-
tion to establish sales capability of 300,000 units per year
in overseas CV markets by the end of the year to March
2008. In the ASEAN region, we plan to realign the distribu-
tion business in Indonesia—a key market for Isuzu—and
strengthen service and after-market functions. We plan to
expand sales channels and after-sales networks in China,
while enhancing collaborative relationships with partner
companies. Isuzu intends to extend the CV product range
in North America by leveraging its leading position in the
LCF market and strong brand equity. Elsewhere Isuzu plans
to invest in sales operations in stages, entering aggressively
into local sales businesses and partnerships in key markets
and moving quickly into untapped markets to develop future
profit opportunities.
Maximizing LCV operating income entails integrating pick-
up-truck platforms with those for AUV and derivative vehi-
cles to maximize sales volume on a global basis, and optimiz-
ing operating efficiency by relocating engineering functions
to Thailand and consolidating manufacturing and procure-
ment functions. These steps should ensure that we retain
capital to invest in next-generation global strategic vehicles.
Isuzu intends to increase the supply volume of diesel en-
gines to the GM Group and grow the DE business in China
to expand and sustain growth of the DE business. As the ini-
tial step, we plan to pioneer a customer base in the industrial
machinery market to strengthen Isuzu’s brand power along-
side developing sales-related infrastructure.
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