GM Returning to Medium-Duty Truck Market

Partnering up with Isuzu.

by on Jun.15, 2015

GM is re-entering the medium-duty truck market through a partnership with Isuzu for 2016.

After abandoning the market segment as it plunged into bankruptcy, General Motors is ready to start marketing medium-duty trucks again.

The Detroit maker will turn to an old partner to help it source the new trucks, marketing the Isuzu vehicles in the U.S. under the Chevrolet brand. GM ended a 35-year relationship with Isuzu in 2006.

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The return to the medium-duty truck market comes as the segment enjoys a strong uptick in sales. Demand has been growing steadily since the end of the Great Recession, climbing another 3.5% since just the beginning of this year.

“Bringing low cab forward trucks back to our portfolio strengthens Chevrolet’s commitment to providing commercial customers with more choices and provides customers with a versatile lineup of trucks, vans and crossovers,” said Ed Peper, U.S. vice president of GM Fleet and Commercial Sales. “This addition helps our dealers satisfy their commercial customers’ needs all in one place.

Chevrolet will produce a 6.0-liter V8 gasoline engine for its new medium-duty trucks that will be sourced from Isuzu.

The decision to re-enter the market for Class 4 to 7 trucks comes as GM CEO Mary Barra sets out to reverse some of the moves made during GM’s run up to and through Chapter 11. The company not only closed dozens of plants, but also ended several long-running alliances.

That included Isuzu, which GM held a stake in for 35 years. Isuzu itself faced some major financial problems during the last decade that led it to abandon the American passenger car market.

Over the years, GM and Isuzu have cooperated on a number of ventures. The Japanese maker provided some of the small cars sold through Chevrolet’s former Geo brand-within-a-brand. And a version of the midsize Chevy Colorado pickup was sold by Isuzu as the i-Series.

This time, Isuzu will be providing the vehicle, its N-Series model, though it is not clear exactly how many medium-duty trucks the deal will entail. Eighty percent of the low-cab-forward trucks will rely on 3.0-liter and 5.2-liter turbo-diesel engines shipped in from Japan. The rest will be powered by 6.0-liter V8 gasoline engines supplied by GM. At least some of the new trucks will be assembled in Charlotte, Michigan.

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The medium-duty truck market grew to 75,000 during the first five months of this year. By comparison, sales were 72,000 during the same period in 2014, and just 53,000 during the January-to-June period in 2010.

Class 4 to Class 8 trucks can be used in a variety of ways, including tow trucks, garbage trucks and intra-urban delivery vehicles. They generally provide hefty profit margins.

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Both Ford Motor Co. and Daimler AG remain major players in the segment.

After shutting down production of its Chevrolet Kodiak and GMC Topkick models in 2009, GM initially planned to enter a partnership with Illinois-based Navistar International Corp. But that deal fell apart.

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It remains to be seen if the new deal with Isuzu will be a one-off venture or if it could lead to other new ties between the old partners.

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