Isuzu 2002 Annual Report Download - page 5

ISUZU MOTORS LIMITED ANNUAL REPORT 2002
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from the current 50% level to more than 90%. In terms of
specifics, we will transfer heavy-duty truck production
from the Kawasaki Plant to the Fujisawa Plant. Engine
production will be transferred to the Tochigi Plant. This
consolidation process is proceeding as planned.
(2) Reducing Group-Wide Workforce Our second task
is to reduce the Group-wide headcount by 13,000 by March
2004. As of March 31, 2002, the total workforce had come
down by 5,500.
(3) Reducing Materials Costs Isuzu was working to cut
materials costs even before we launched the Isuzu V Plan.
We are reducing these costs through reviews of parts
specifications and the use of standardized, common parts
on a worldwide scale. The company will draw on the
know-how and database of General Motors’ Worldwide
Purchasing (WWP) system with the aim of lowering costs
by 20% over 3 years. As of March 31, 2002, we had
already lowered materials costs by 13% as compared to
October 2000.
(4) Reduce Total Consolidated Assets (Excluding the
Finance Segment)
By March 2004, we will reduce total
consolidated assets by approximately ¥350 billion, to
¥1,110 billion to enhance the efficiency of capital utiliza-
tion. To accomplish this objective, the company will
reduce interest-bearing debt by approximately ¥250 bil-
lion to ¥510 billion. As of March 2002, total assets had
been reduced by ¥210 billion and interest-bearing debt
was brought down by ¥70 billion, compared to the time
the Isuzu V Plan was launched.
(5) Reinforce Earnings Power of Domestic Dealers Isuzu’s
41 dealers will be consolidated into roughly 25 dealerships
and the existing 400 service outlets will be combined into
320. The goal is to reinforce the earnings power of do-
mestic dealers, making all dealers profitable by the fiscal
year ending March 31, 2004. As of the end of March 2002,
we had reduced the dealer network by 1 to 40 and re-
duced the number of service outlets by 20 to 380.
(6) Realign Isuzu Group Companies The core task here
is to review all of our Group-wide businesses. Isuzu will
rationalize and realign non-core businesses to optimize
operating efficiency. Following review and consolidation
of operations, the number of Group affiliates, formerly
109, will be reduced by 40% by March 31, 2004. As of
March 31, 2002, we had reduced Group affiliates to 83.
(7) Review the SUV Business in Japan Isuzu will review
its SUV business in Japan, reciprocally use marketing
resources with GM and transform Isuzu sales outlets into
GM AutoWorld outlets. As of March 31, 2002, 24 Isuzu sales
outlets had been converted into GM AutoWorld outlets.