Free Advice to Isuzu – What You Could Have Done Instead
By Chris Haak
With that Isuzu would stop selling light vehicles in the US on January 31, 2009, many people were not surprised to hear the news. After all, their product lineup has limped along for the past half decade consisting solely of rebadged GM vehicles. The entire value proposition that Isuzu offered to consumers was a longer warranty than the equivalent GMC or Chevrolet SUV or midsize pickup offered. However, the cost of buying an Isuzu was a small dealer network (making it difficult to find service or support if needed while traveling) and puzzled glances from strangers when you told them you drove an Isuzu I370 or Ascender…and even more puzzled glances when you tried to trade it in on a new vehicle. (“Too bad it’s an Isuzu and not a GMC.”)
Even before Isuzu announced that it was abandoning the US market, Techshake’s Blake Muntzinger speculated on some possible alternatives for Isuzu two weeks ago. You can read his excellent piece ; basically, he said that Toyota’s ownership stake in Isuzu could have allowed them to sell rebadged versions of Toyota vehicles sold elsewhere in the world in the US as Isuzus. To expand on Blake’s concept, a few of us had a conversation yesterday afternoon about how Isuzu just seemed to “give up” without trying very hard to find new product. As a service to Isuzu, we’ll recap a few of the main points of that discussion below.
Find Different SUVs and Pickups to Rebadge
Isuzu’s stated rationale for leaving the US was that they had no product to sell with the impending demise of the GMT360 Ascender midsize SUV. Although this has not been stated, the Chevrolet Colorado/GMC Canyon-based Isuzu I-series pickups (which Isuzu codeveloped, by the way) may also be on their way out the door. Well, is GM the only company to sell body on frame SUVs and midsize pickups? For example, why couldn’t Isuzu have worked out the same deal for a rebadged Frontier pickup with Nissan that Suzuki did? At this point, it’s too late because Suzuki took that prize, but a Nissan Frontier badged as an Isuzu would have probably been an easier sell to consumers than Suzuki’s first pickup truck. Also, since Nissan Pathfinder sales were down last year, Isuzu could have sold its own version of the Pathfinder to replace the Ascender – and it could have had consistent styling with the pickup. Suzuki’s upcoming Equator pickup looks like a Nissan Titan with a Toyota Tundra’s grille, but nothing like other Suzuki products, such as the XL7 and Grand Vitara.
Serve as the Entry Point for Mahindra & Mahindra Trucks into the US Market
Indian manufacturer Mahindra & Mahindra has ambitions of setting up a US dealer network and offering its utilitarian pickups and SUVs (the SUV pictured is the Mahindra Scorpio) for sale here. If they’re durable and priced right, they could find some buyers, but M&M will have some substantial obstacles to entry: emissions and crash testing, establishing a dealer network, and most importantly, getting their brand into consumers’ minds and onto their shopping lists. Since Mahindra & Mahindra plan to sell only trucks, and since Isuzu sells only trucks, wouldn’t it have been far easier for these companies to work out an arrangement whereby Mahindra & Mahindra enter the US market selling vehicles badged as Isuzus, then after a few years, buy the Isuzu dealer network outright and change the name on the signs? This was similar to the way Kia entered the US market; their product was here (as the Ford Festiva) before their name was.
Sell Small Cars – Chinese or Others – In the US
Isuzu may not have the brand recognition that it did years ago (particularly during the excellent “Joe Isuzu” era), but I guarantee more consumers are aware of Isuzu than they are of Chinese brands such as Chery or Geely who aspire to sell vehicles in the US. Why not change the company’s focus from SUVs and pickups – whose popularity is declining thanks to high gas prices – to small, fuel efficient vehicles? One set of alternatives would be the plan proposed by Mr. Muntzinger, as linked previously. Another would be to serve as a conduit by which Chinese manufacturers sell their wares in the US, branded initially as Isuzus, until they have proven themselves.
There are countless other options for Isuzu – scores of companies would kill for a pre-established dealer network and brand name in the US – but it really does seem as if Isuzu didn’t try as hard as they could have to stay in the US market in one form or another. Nearly any option could have increased their sales beyond the pitiful 7,000 mark they set for 2007. Even if they sold 10,000 rebadged Nissans, that would be a 42% sales increase and something to build upon.
But alas, the Isuzu dealers will either exit the business with settlement checks (equal to $1,000 for each vehicle sold over the past four years) or will soldier on as used car facilities and service centers only.
Please comment below if you have other free advice for what Isuzu might have done to stay in the US.
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