Isuzu

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DANIEL TAUB

Staff Reporter

Which Japanese auto maker saw its sales growth outperform the overall U.S. auto market last month with an increase of 32 percent and had the sales of one vehicle jump a whopping 1,142 percent?

Not Honda, not Toyota, and certainly not troubled Nissan. It was American Isuzu Motors Inc., the Cerritos-based U.S. marketing arm of Tokyo-based Isuzu Motors Ltd.

While Isuzu has a tiny U.S. market share, it is finding success in sport utility vehicles. In fact, that’s about all Isuzu sells in the United States.

“The fact that they’re focusing on (SUVs) obviously was a smart move, and they decided to do it at the right time,” said Dean Benjamin, president of Autosource Inc., a Manhattan Beach consulting firm. “Even with a limited lineup, they’re participating in the hottest market we have right now.”

While industry-wide sales of mini-SUVs grew 25.9 percent last month, Isuzu’s entry in that category the Amigo posted sales growth of 1,142 percent.

The actual numbers are small. A total of 969 Amigos were sold last month, compared with only 78 in February 1998. But analysts say it’s a sign that consumers are paying attention to the newly redesigned vehicle, which is available in hard-top and soft-top models for the first time.

In fact, Isuzu has spent the past several months promoting itself as the “no cars” company part of its new “Go Farther” advertising campaign. “Don’t call it a car,” reads an ad for one SUV. “It gets mad.”

“In terms of our heritage, we have been a truck builder for all of our history,” said Bob Reilly, Isuzu’s senior vice president and chief operating officer for sport utility vehicles. “And our 1999 campaign really leverages off that.”

Reilly said Isuzu’s strong performance has helped American Isuzu Motors remain profitable, even as its parent company struggles in economically troubled Japan.

In January, Isuzu said it expected auto sales in Japan to slip 7.6 percent in 1999. Last year, they fell 30 percent. (Isuzu’s competitors are having similar problems in Japan, where the auto industry is in its worst slump in more than 50 years.)

While Isuzu is doing well overall in this country, sales of one of its compact SUVs the Rodeo have dipped slightly. In February, Isuzu sold 3,697 Rodeos, compared to 3,805 in the like period a year earlier.

The drop is significant, analysts say, because the Rodeo is Isuzu’s best-selling vehicle, outpacing its two next-best performers, the Trooper SUV and Hombre pickup, combined.

“Isuzu’s bread and butter is the Rodeo,” said Eric Noble, director of marketing at AutoPacific Inc., a Santa Ana-based automotive consulting firm. “The trouble is, as good as the current Rodeo is, it’s in a segment that is intensely competitive.”

Noble said the model faces increasing competition from vehicles made by Jeep, Ford and others particularly because the Rodeo has risen slightly in price, but not in size, over the past several years.

A number of compact SUV makers are offering steep discounts on their vehicles something Isuzu has not done. “We’ve chosen not to incentivize as aggressively as some of our competitors have,” Reilly said.

Meanwhile, Isuzu officials and analysts are optimistic about the launch this spring of VehiCROSS, a two-door SUV that one auto reviewer wrote looked like a “product of the Star Wars school of design.”

Isuzu will build only 200 of the vehicles a month. Still, analysts expect it to boost Isuzu’s image as a maker of sporty vehicles.

“It’s what we call a halo vehicle,” Noble said. “And a halo vehicle’s intent isn’t really a per-unit profit, it’s to enhance brand image by refocusing consumer attention on the brand through a vehicle that is perceived to be innovative.”

Also expected to give Isuzu a boost is the decision by General Motors Corp. in December to increase its ownership stake in Isuzu Motors from 37.5 percent to 49 percent.

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