Maybe it’s not a problem, but an opportunity

By Blake Muntzinger

01.16.2008

Risks drive the automotive industry, each with its own payoff. Toyota’s Scion division and GM’s Lambda crossovers exceeded expectations, while Chrysler’s Pacifica and Honda’s Accord Hybrid were not as popular as hoped. These listed companies have, more or less, a diverse enough product lineup to compensate for a misstep. As another auto show season arrives, it becomes more obvious which brands are not so lucky.

Isuzu, exhibiting at neither the Detroit nor Chicago shows this year, is one such brand. Its portfolio changed in 1993 when it abandoned the US small car market, focusing on the growing popularity of SUVs. A risky move, but at the time, more people wanted Explorers and Cherokees, not Escorts and Tercels. Isuzu never looked back.

It is 2008. Perhaps it wishes it did.

Isuzu lost itself in the light vehicle market. Sales in 2007 were down almost 18 percent from 2006, selling just 7,098 vehicles. Dealers have closed left and right, including the 2004 Canadian exodus. Its remaining models are warmed over vehicles easily found at a Chevrolet or GMC dealer: the Ascender (a TrailBlazer/Envoy clone on its deathbed) and the I-series (relative to the Chevrolet Colorado/GMC Canyon).

Commercial vehicles and diesel engines are success stories; however, proving Isuzu still carries potential. As fuel efficiency becomes more en vogue, Isuzu could seize the opportunity from Toyota’s 5.9 percent ownership for a reinvention. The re-using of Toyota platforms – as Seat does with Volkswagen – limits costs, allowing Isuzu to create products with sportier, edgier designs – is not a foreign idea considering its previous VehiCross and Axiom models.

Revive the Impulse

Isuzu’s two-door coupe left our shores in 1992. Since then, its competition either grew up (e.g. Mitsubishi Eclipse) or died (e.g. Ford Probe). Isuzu should resurrect the Impulse nameplate. Low development costs are key to the success of this idea; use the last-generation Celica platform with the same powerplant, Toyota’s 1.8 liter engine. With unique styling and a Lotus-tuned suspension, the Impulse responds to those wishing the Eclipse would return to its roots, or, for that matter, a bargain-basement Celica. Honda’s announcement of a hybrid CRX successor means this segment could get interesting, a low-cost hybrid platform might be a possibility as well..

True compact pickup

Today’s compact truck segment is filled with not-so-compact trucks. Offerings from Nissan, Toyota, GM, and Dodge became midsizers, leaving the market to the Ford Ranger – whose epitaph is not quite minted. Toyota showed us its interest in returning to the segment with the A-BAT concept. If it becomes reality, Isuzu could potentially differentiate its own version from Toyota’s – not simply a re-badge job, but a decidedly different take on Toyota’s small truck.. If not, it can use its D-Max – a vehicle that should have come stateside.

Daihatsu factor

Toyota also owns 51.6 percent of Daihatsu, not sold in the States since 1992. Just as with the Honda Fit and Scion xA and xB sold in Japan for years before they showed up in the States, any vehicle chosen from Daihatsu would be new to Americans and therefore have some measure of excitement if it were to show up with an Isuzu badge. While much of its lineup consists of kei-cars, an SUV marketed in Japan as the Daihatsu Be-go (aka: Daihatsu Terios in Europe and Toyota Rush in Japan) would also be a fresh addition to the American market. The Be-go, 2.1 inches shorter than the first-generation Toyota RAV4 four-door, would slot underneath the current RAV4 in the segment offering buyers a Matrix alternative and be some worthy competition to Suzuki’s SX4.

Diesel engines

Diesel is slowly gaining popularity in the US, with new entries from Toyota, Honda, and Jeep. Isuzu and Toyota are collaborating on a 1.6-liter diesel engine for use in Europe beginning in 2012. As GM showed with the Opel Astra, if it is good for Europe, try it in the States. The pickup and Be-go would be logical candidates for this treatment, especially as Toyota works on becoming greener. However, 2012 is an eternity in the auto world.

Isuzu has not sold its own vehicles (trucks or cars) since the 2004 Axiom and Rodeo. Using Toyota platforms would be a win-win for both companies. More vehicles built off the same Toyota platforms reduces their costs per vehicle. Starting up Isuzu again with a clean slate with Scion-like marketing would fix Isuzu’s almost-dead brand image – carving out its niche just in time to battle the Chinese when they arrive.

Isuzu is (way) down, yes, but not out. The clock, however, is ticking.

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