Isuzu planning to buy major share in GM trucks Australia

Isuzu Motors, Japan's largest truck maker by sales, plans to buy General Motors' truck operations in Australia. Isuzu's shares rose as much as 5 per cent.

Isuzu, about 8 per cent owned by GM, planned to buy GM's 40 per cent stake in the venture and turn it into a wholly owned subsidiary, said Isuzu spokesman Kouitsu Mabuchi.

GM lost $3.8 billion in this year's first nine months and has had four straight quarterly losses, its longest stretch without a profit in 13 years. Earlier this month, it sold its stake in Fuji Heavy Industries to Toyota Motor and on the market.

Isuzu's decision to buy the joint venture means GM will hold on to its stake in Isuzu, said Atsushi Kawai, an auto analyst at Mizuho Investors Securities in Tokyo.

"This would confirm that the link between GM and Isuzu is close," said Kawai, who has an "outperform" rating on Isuzu.

"Isuzu wouldn't buy out the venture" if GM plans to dissolve its relationship with the Japanese automaker.

General Motors, the world's largest carmaker, has been raising cash by selling off assets. In addition to the stake in Fuji Heavy, which brought in about $737 million, GM is planning to sell a stake in General Motors Acceptance, the carmaker's profitable finance unit.

In August, GM said it would sell a 60 per cent stake in GMAC's commercial-mortgage unit to an investor group that includes New York-based Kohlberg Kravis Roberts & Co. GM didn't give a transaction value. Isuzu will take a majority stake in a new truck unit in South Africa, which will be spun off from GM's subsidiary, the Nihon Keizai newspaper reported yesterday.

- BLOOMBERG