Description:
A Closer Look At Isuzu
Part One: Getting On Consumers Radar Screens
Writer's Notes
Isuzu Line-up:
Isuzu Rodeo Sport
MSRP Range: $13,999 - $19,415
Isuzu Rodeo
MSRP Range: $15,999 - $21,379
Isuzu Axiom
MSRP Range: $24,345 - $29,995
Isuzu Ascender
MSRP Range: $28,649 - $31,349
Editor's Note: This is the first article in a series about the Japanese automaker Isuzu and its role in the U.S. market. Watch for future installments in which contributor Tara Baukus Mello will compare the Isuzu Ascender to the GMC Envoy and look at the 2004 Isuzu Axiom's new direct injection gasoline engine.
Comments or suggestions about this review? Send an e-mail to: editor@autobytel.com
Autobytel Inc. operates the popular automotive websites Autobytel.com, Autoweb.com, Carsmart.com, and Autosite.com.
xxx
I was meeting a friend for dinner the other night and, by sheer coincidence, we pulled into the parking lot at nearly the same time. As he walked over to great me, he said, "Sharp SUV. What is it?" When I told him it was the Isuzu Ascender, he said, "Really? I thought they were going out of business."
Such is the struggle of American Isuzu Motors Inc. these days. They build respectable sport utility vehicles that should be strong competitors in the U.S. market based on features and price, yet business has been struggling. One of the early players in the SUV market, Isuzu also sold cars in the U.S. until 1993, when it decided to focus solely on this new, emerging trend. Today, the company offers four sport-utes in the United States—the Ascender, which replaced the Trooper for the 2003 model year, the Axiom, the Rodeo and the Rodeo Sport—a miniscule product line compared to its competitors.
One of the early players in the SUV market, Isuzu also sold cars in the U.S. until 1993. The last passenger car it produced was the Isuzu Stylus. Today, the company offers four sport-utes in the United States-the Ascender, which replaced the Trooper for the 2003 model year, the Axiom, the Rodeo and the Rodeo Sport.
A tiny advertising and marketing budget has made it hard for Isuzu to get on the radar screen of the buying public and, when they did succeed, vehicle pricing that was, (until recently) higher than the competition often quickly removed them from the consideration list. These factors, combined with the declining sales of the automotive industry as a whole, meant that Isuzu was hit hard. 2002 sales dropped to roughly half what they were at the company’s peak in the early 1990s, with the company selling 52,992 vehicles for the year.
It was not a pretty picture and drastic measures were required if Isuzu were to pull itself out of the downward spiral. The result was a turnaround plan that, from the outside, could be interpreted as a company that is on the verge of going out of business. In addition to layoffs and other corporate changes often seen in struggling companies, Isuzu also choose to nearly eliminate its fleet sales. It’s a move that allowed it to focus more on selling to individual consumers, but from a pure numbers perspective makes the company look as if it is still bleeding heavily. For the first half of 2003, sales dropped another 39.5 percent, when compared to the first six months of 2002. It is all, however, part of Isuzu’s plan to turn the company around, according to president J.T. “Terry” Maloney and he says it’s working. “Our stock is up over 70 percent since late May and our strategy is on track for recovery,” assures Maloney.
Another belt-tightening measure, the decision not to replace its Rodeo model in 2005, also raised eyebrows in the industry, but again Maloney asserts that it’s all part of the necessary measures to get the company back on track, before they can begin building it up again. These changes have led to rumors throughout the industry that Isuzu will stop selling vehicles in the United States altogether, a distinct possibility according to some industry analysts.
“Isuzu is competing in one of the most competitive segments in the market and consumers just aren’t aware of them as a possible vehicle choice,” said Rebecca Lindland, senior market analyst at Global Insight. “In order to succeed in the market, Isuzu needs some kind of a hook that will get consumers to pay attention. Without that hook to boost sales, we could see them stop selling vehicles in the United States,” she said.
Isuzu is trying hard to find that hook and get back on consumer’s radar screens. For 2003, it cut sticker prices on its vehicles by about 13 percent by eliminating infrequently used features, while making improvements in other areas of each vehicle. Retail prices for all of its vehicles dropped by over $2,000 for 2003 models compared to 2002 prices. For example, the base model of the Isuzu Rodeo S, which comes with a 2.2-liter four-cylinder engine and five-speed manual transmission with two-wheel drive, was priced at $18,380 for 2002 and was cut to $15,999, a difference of $2,381.
In addition, it boosted its free roadside assistance program from five years/60,000 miles to seven years/75,000 miles. The plan includes fuel delivery, lockout service, jump-start, flat-tire change and towing, among other features. It also offers a special number for the hearing impaired.
“Our goal was to reduce our overhead and control expenditures, while communicating to our customers that we are over-delivering on our products,” said Maloney. The results of the changes have helped Isuzu stem its bleeding, although perhaps not as much as it hoped thanks to several external factors. The war in Iraq, for one, was not in the realm of possibility when Isuzu created its turnaround plan. U.S. auto sales overall struggled in the first quarter of 2003 as a result of the American effort overseas and Isuzu was one of many automakers that were effected. Then, in mid-May, tornadoes ripped through the Midwest, hitting the Oklahoma City factory where the Isuzu Ascender and its cousin, the GMC Envoy, are produced. About the same time, Ascender sales began to pick up and dealers started asking for more units. Unfortunately, the damage was extensive and the production line was shut down for almost seven weeks.
Despite its challenges, Isuzu continues to make slow progress and is keeping its eyes peeled toward the future. Its Axiom sport-ute will receive a mild redesign for the 2004 model year, but the biggest news is the addition of a direct injection gasoline engine, which will be standard in the Axiom and optional on the Rodeo for 2004. The 250 horsepower, 3.5-liter gasoline-powered direct injection V6 will see fuel economy improvements compared to the current, non-direct injection engine bringing its rating to18 mpg city and 23 mpg highway—an improvement of six and 10 percent respectively. The new engine will be available in September 2003 in the redesigned 2004 Axiom.
Also arriving as a 2004 model will be a five-passenger version of the Ascender, which will have a 4.2-liter DOHC six-cylinder engine that produces 275 horsepower and 275 lb.-ft. of torque with either two-wheel drive or four-wheel drive systems.
Isuzu’s recent concepts based on the Axiom provide a hint of the company’s future direction. Scott Hyde, executive manager, product planning, said that all three proved popular with the public. “The XSR’s open top struck a passionate chord, while the XST appealed to people’s functional side. The color of the high performance XSF is what led us to the addition of red as an exterior color on the ’04 Axiom,” he said.
Further down the road, Isuzu has said it will launch an all-new SUV in 2006. Few details have been released about this vehicle, but the company has said it will have three rows of seats and feature the same direct injection gasoline engine as in the 2004 Axiom. All told, while Isuzu may not be on the radar screen of the majority of the American buying public, serious efforts are underway to get the company back on the consideration list. “Our quality is strong, and we offer many features for the price, compared to our competitors,” said Maloney. “If consumers would just shop the vehicles, I think they’d be hard pressed not to buy one.”
---Story by Tara Baukus Mello
© 2002, Tara Baukus Mello, All Rights Reserved. |
51 ( -10 -19.6% )