Japanese truck maker Isuzu said it had shelved plans to jointly develop a clean diesel engine with Toyota as the global economic downturn hits the auto industry hard.
Isuzu Motors and Toyota Motor Corporation had planned to develop a 1,600cc aluminium-made diesel engine for small Toyota cars to be sold in Europe, but markets there have been engulfed in the global financial crisis.
"The two companies agreed on a temporary suspension which was requested by Toyota," an Isuzu spokesman said.
Production of the engine was due to start around 2012 at a new plant that an Isuzu subsidiary would build in the northern Japanese city of Tomakomai.
Toyota, which has a 5.9 per cent stake in Isuzu, has formed a business tie-up in research and production with the truck maker.
Isuzu is also reviewing investment plans, the spokesman said.
Also Read
Isuzu president Susumu Hosoi said the company intends to freeze some capital spending plans, including those in Saudi Arabia and Russia, according to recent interviews published today by Kyodo News agency and the Nikkei daily.
"Given unclear outlooks for sales, the market and foreign exchange rates, we have to freeze all projects that have not yet been officially decided on in order to restrain our spending," Kyodo quoted Hosoi as saying.
The Isuzu president said he would like to help the group's ailing US partner General Motors "but what we can do is very limited because we are also in a difficult situation", the report said.