GM and Isuzu go strategic The relationship between General Motors Corp. and Japan's Isuzu Motors Ltd. is expected to expand as GM seeks to increase truck sales around the globe. The U.S. OEM currently owns 37.5% of Isuzu and holds a seat on its board of directors. According to the Dow Jones Newswire, GM vp Tom Davis, who heads up the OEM's truck group, says the relationship between the two firms is evolving from a commercial to a strategic one. While much of the discussion revolves around pickup trucks, such as the joint venture at GM's plant in Shreveport, La., that produces the Isuzu Hombre model, the two OEMs also want to sell more commercial trucks. According to Davis, GM and Isuzu have begun producing a medium-duty truck that combines an Isuzu cab with a GM chassis. He points to the project as an example of how both companies could cut engineering costs by building combined products for some markets. Speculation holds that in some countries, particularly the People's Republic of China, GM will want to sell trucks under its own nameplate and use the Isuzu marque in places where it is more familiar to buyers. In addition to Asia, GM is focusing on increasing truck sales in Latin America, especially Brazil.
Volvo India to build heavy trucks A wholly owned unit of Volvo of Sweden, Volvo India Pvt. Ltd. will begin building heavy truck tractors by this year's second quarter. According to Volvo India managing director Ravi Uppal, the firm will establish a factory near Bangalore in southern India. He noted this will be the first such operation set up by Volvo in Asia and will be used as a production base for the entire subcontinent. While dual-axle trucks predominate as longhaul vehicles in India, Volvo believes a tractor would win converts by demonstrating reduced fuel costs and by reducing congestion and emissions.
Mexican OEM opens plant Mexico's Consorcio G Grupo Dina has opened a $50-million truck and bus plant in Argentina to serve countries in Latin America's Mercosur common market. The plant will produce about 4,100 Dimex cargo trucks and Dina passenger buses. Approximately 70% of that output will be exported to Mercosur nations by 2000. In addition to Argentina, the Mercosur trade bloc consists of Brazil, Paraguay, and Uruguay. The group also has separate free-trade agreements in place with Chile and Bolivia. With Argentine exports, according to the OEM, Dina hopes to capture 8% of the Mercosur commercial-vehicle market.
PPG to buy Italian paint maker PPG Industries has agreed to buy Milan-based Max Meyer Duco SpA as a means of reinforcing its position as a leading supplier to the European auto industry. Max Meyer supplies vehicle paints and coatings from plants in Milan and Naples.
Border-crossing milestone Indianapolis-based Celadon Group Inc., the first truckload carrier to bring trailers into Mexico, has completed 550,000 trailer crossings to Mexico since 1985. Speaking at the recent seventh annual truck conference of the North American Transportation Alliance, Celadon CEO and chairman Stephen Russell said that despite facing problems not endured by domestic carriers, Celadon has been successful with its Mexican business. "Mexico has 90-million people and it's only three days by truck from Mexico City to Chicago vs. four weeks by ship from Taipei," he stated. Russell said NAFTA has helped but the real key to growth has been lower labor costs in Mexico since the peso was devalued in 1994. "In Mexico," he noted, "a penny-per-mile-lower rate will not shift a customer away to another carrier. Service and reliability are critical. We trust our clients in Mexico and they trust us."
Russian truck deal settled The buyout specialists at U.S.-based Kohlberg Kravis Roberts & Co. (KKR) have announced reaching an agreement with the regional Russian government of Tatarstan on a $3.5-billion investment made in truck maker AO Kamaz, which Tatarstan controls. Observers consider the deal a compromise that clears up matters dating back to 1994. At that time, KKR was brought in to provide financial advice, debt refinancing, and new investments in Kamaz. For its role, KKR was to receive consulting fees and options to buy up to 49% of Kamaz stock at below market-value prices. Now, Tatarstan will either acknowledge KKR ownership of a 16% stake and then buy it back at a mutually agreed upon price, or it will let the firm exercise options on the same block of shares and award it a seat on the Kamaz board.
Free Canadian postings Freight-matcher DAT Services is seeking to grow its business by offering free postings through March 30 to any U.S.-based transportation customer posting into or out of Canada. According to Chris Naze, product manager of the Portland, Ore.-based firm, liberalization of Canadian cabotage rules could not have come at a better time. "The lifting of repositioning restrictions," he says, "is a major opportunity for both Canadian and U.S. companies. The Canadian emphasis is a logical step." Dat Services specializes in matching longhaul freight.