Loss of GM Business Won’t Hurt Thailand’s Isuzu Engine, Exec Says

Isuzu Engine Mfg. Thailand Co.’s production numbers won’t be affected when General Motors Corp. stops buying Isuzu diesels for its Thai-built Chevrolet Colorado pickup trucks, an executive says.

GM is building a $556 million powertrain plant in Thailand, due to open in 2010 with an annual capacity of more than 100,000 units. It will produce 2.5L and 2.8L diesel engines for GM pickup trucks.

“We will have no problem, even when GM stops receiving products, because the excess output can be absorbed by our own pickup trucks, which are getting a boost from exports,” Tri Petch Isuzu Sales Co. President Morikazu Chokki tells the Bangkok Post.

Tri Petch Isuzu Sales is the local distributor of Isuzu vehicles.

Chokki says Isuzu will be expanding its diesel engine plant but still is working on its investment plan.

Isuzu’s export volume is expected to total 140,000 vehicles this year, up from 130,000 units in 2007, he says. Some European markets would be hit by the U.S. financial crisis, but the Middle East market, Isuzu’s biggest export target, continues to grow.

Thailand’s continuing political instability and record-breaking oil prices have damaged consumer confidence, Chokki says, but he expects sales to grow in the final quarter because oil prices now are falling and the harvest season is getting under way.

Isuzu is forecasting full-year industry-wide Thai vehicle sales of 650,000 to 660,000 units, up from 631,251 last year, with pickups taking 55% to 60% of the market. Isuzu sales are forecast at 150,000 units.

Toyota Motor Thailand also has announced an investment of 5.4 billion baht ($158.3 million) to expand diesel-engine production in Thailand from 200,000 to 350,000 units per year. Its new plant should begin commercial production in 2010.