"Next year, we are going to import more vehicles for domestic sales, even though we will have to pay higher tariffs for that," said Shin Hoshino, chairman of the company, which is a 49:51 joint venture between Japanese companies Mitsubishi and Isuzu Motors.

Established in August last year with a registered capital of US$4 million (Bt143 million), Isuzu Motors de Mexico enjoys a special privilege under an economic-partnership agreement (EPA) between Mexico and Japan.

Under the EPA, the Mexican government allows Japanese car companies to import vehicles into Mexico for sale in the domestic market at a special tariff rate that is scheduled to be eliminated altogether in 2011.

The number of vehicles, however, is limited to 5 per cent of the total sold in Mexico. Under the quota system, Isuzu is allocated 1,121 units per annum.

Hoshino said that at present, Isuzu, with dealerships in Mexico City, Monterrey and Guadalajara, has enough stock for only two months of delivery.

Isuzu now markets two models - the ELF 400 and the ELF 450 - which puts it in the same market that is dominated by Ford and General Motors (GM). At present, Ford and GM control a combined market share of 74 per cent. One year on, Isuzu's market share is 10 per cent, compared with 6 per cent for Volkswagen and 10 per cent for other international auto-makers.

An Isuzu survey showed that from January to October, Isuzu sold 663 units, compared with 3,232 for Ford and 1,621 for GM. The segment's total sales were 6,525 units. However, Ford and GM showed a drop in sales year on year, of 4 per cent and 44 per cent, respectively. In the same period last year, new start-up company Isuzu sold only 27 vehicles.

Takeshi Wakayama, president of the Mexican subsidiary, attributes the success to the fact that among light trucks in the category, only Isuzu vehicles are powered by diesel, while others are powered by petrol and liquefied petroleum gas. Other vehicles are also bonnet-type, while Isuzu's are "cab-over", meaning that Isuzu's front is shorter than others - appropriate for the hilly conditions of Mexico.

To support fleet sales, Isuzu has arranged, among other activities, training sessions for corporate clients, whose drivers learn how to use the vehicles efficiently and with a minimum of fuel consumption.

"We foresee a high growth potential in the market. The ELF 400 and ELF 450 are of the same quality as trucks sold in the US, and they also pass the EPA 04 emission standards," said Wakayama.

Achara Deboonme

The Nation

Mexico City