"Isuzu has already withdrawn its capital from Guangzhou Isuzu earlier this year, and the company has now been fully integrated into Denway Passenger Car under the Guangzhou Automobile Group (GAC). A senior source from GAC, who wished to remain anonymous, revealed this information to a local newspaper. 'We can now officially announce that with the integration of the passenger car segment, GAC Bus is expected to be formally established in the second half of this year, and it will adopt the Guangzhou Automobile brand,' the source said. According to the insider, GAC Auto’s own brand will now form two major passenger car segments within the GAC Group, alongside Shenyang Automobile’s Shenfeng Hino."
"The Isuzu trademark is still available for use," the source added. "Until July 1st this year, we can still use the Isuzu logo, and Isuzu will continue to provide related components." The executive also mentioned that the Guangzhou Yuangang plant, previously used by Guangzhou Isuzu, will continue to produce Denway-branded buses.
The divestment of Isuzu marks another significant case where a global automotive giant has lost ground in the Chinese market. Earlier reports suggested that Isuzu Motors, Japan's largest truck manufacturer, planned to sell its Guangzhou Isuzu Bus Co., Ltd. to GAC Group by the end of March this year. Established in March 2000, the joint venture had GAC and Isuzu holding 51% and 49% of the shares, respectively, with a registered capital of $46.8 million and a production area of 100,000 square meters.
According to the GAC official, this eight-year-old bus company will now fully return to GAC’s control. The source expressed dissatisfaction with the changes at Guangzhou Isuzu, pointing out that the company’s failure stemmed from an inflexible sales strategy and a small production scale, which led to high management costs and no cost advantage. Despite plans to produce 800 vehicles and 400 chassis annually, the actual output was less than 200 units per year, with many vehicles entering the Guangzhou Airport Express Line through administrative channels. Earlier reports indicated that Isuzu exited the joint venture due to poor sales performance and long-term losses, failing to meet initial expectations.
After exiting Guangzhou Isuzu, Isuzu will focus on operating its Qingling Auto business in Chongqing. Currently, only Qingling Automobiles are still investing in Isuzu Motors, with both parties jointly establishing the Qingling Isuzu (Chongqing) Automobile Sales Company, each investing $2.3 million. However, under pressure from competitors like Futian, Jiangling, and Dongfeng, Qingling has struggled to maintain its position in the light truck market.
GAC’s move to integrate Guangzhou Isuzu into its passenger car segment has been part of a broader strategy. After successfully reorganizing GAC Guangzhou Yangcheng and GAC Denway passenger cars in early 2007, the company achieved profitability after a year of operation. This year, GAC successfully integrated Guangzhou Isuzu into the Denway passenger car division, enriching the product lineup from 6 to 12 meters in length, accommodating 16 to 55 passengers.
The China-Pakistan series of buses, formerly known as "Yangcheng Passenger Cars," currently holds 80% of the mid-to-high-end CMB bus market in Guangzhou. GAC’s passenger car exports have grown rapidly, with annual growth rates exceeding 100%. The group’s ambitions in the passenger car market go beyond Denway. The senior source revealed that GAC Bus is expected to be established in the second half of this year, adopting the Guangzhou Automobile brand. "As with passenger cars, we also place great importance on our own brand in the bus sector. In addition to the well-known Guangzhou Automobile brand, we also provide financial support," he said. "Guangzhou already has a strong foundation and hopes to develop its own brands. There's a lot to do in the passenger car segment."
The group’s vision for GAC Bus is to become a well-known brand in major economically developed regions, producing products that are close to the market. Over the next five years, the annual sales growth target is high. This year, the goal is to reach 2,000 units, doubling the previous year’s number. To prepare for the establishment of GAC Bus, the company is streamlining operations, integrating sales channels, and reducing personnel to ensure smooth progress.
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