Isuzu Motors Ltd. has canceled its 555 project to replace the American-built Rodeo SUV in 2005.
The cancellation will mean the end of Isuzu's core U.S. product at a time when dealers are wondering whether the franchise will survive.
Isuzu said at the make meeting Monday that dealers will get two new SUVs - a version of the GMC Envoy, and a seven-passenger SUV that will be imported from an Isuzu factory in Thailand. Officials told dealers the U.S. SUV will not use a diesel engine. It will go on sale in the United States in the 2006 model year - the same time that the next-generation Rodeo would have hit dealerships under the 555 project schedule.
Dealers had mixed reactions. Some applauded the plans as confirmation of Isuzu's commitment to selling in America, but others saw the change of plans as more evidence of trouble.
"I don't see how the franchise is going to survive," said Independence, Mo., Isuzu dealer Ed Parker. "Every day you're waiting for something to change for the better and it doesn't."
But Isuzu Motors America has been attempting to steady the ship. Terry Maloney, Isuzu's U.S. president, told dealers the automaker cut $190 million out of its operating overhead - 51 percent of its total. Maloney told the group that the American unit had posted a profit in January, and that the Japanese parent company had closed the most recent quarter with a profit.