Isuzu Motors
Corporate History & Strategy

In 1981, Isuzu formulated a development plan for the 'R-car' passenger car in collaboration with GM. The plan called for Isuzu to invest 70 hundred million yen to build a new factory in Hokkaido with an annual production capacity of 200,000 units. Of these, 100,000 units would be for the domestic market and the remaining 100,000 for export to North America, where they would be sold through GM Chevrolet's sales network.

At the time, U.S.-bound automotive exports were already restricted due to U.S.-Japan trade friction, but the restrictions were expected to be a three-year temporary measure. Isuzu judged that the restrictions would be eased by 1984 and decided on the large-scale investment premised on North American exports.

In June 1984, Isuzu established the Hokkaido Factory, a passenger car-dedicated plant in Tomakomai City, Hokkaido. Equipped with an annual production capacity of 200,000 units, it was positioned as a base for mass production of the R-car for GM and for North American exports.

The investment of 70 hundred million yen was an excessive scale for Isuzu, but backed by the collaboration with GM, the world's largest automaker, this was a decision that staked the company's passenger car business on a leap forward.

However, throughout the 1980s, U.S.-Japan trade friction continued to intensify, and the automotive export restrictions to the U.S. (1.6 million vehicles per year) extended beyond a temporary measure and became long-term. Isuzu's allocated export quota was a mere 16,000 units (approximately 1% of the total), fundamentally undermining the premise of the plan to export 100,000 units annually to North America.

Mass production of passenger cars at the Hokkaido Factory became untenable, and the city of Tomakomai expressed 'great disappointment.' The vast factory site that Isuzu had secured had no prospects for utilization, and the growth strategy dependent on GM collapsed due to changes in the external environment.