ISUZU MOTORS LIMITED

Business Details

The Group's core businesses are the manufacture and sale of Heavy- and Medium-Duty Trucks & Buses (CVs), Light Trucks (CVs), Pickup Trucks and Derivatives (LCVs), and Industrial Engines (Powertrain). From FY2026 (ending March 2026), following a review of performance management classifications, the reportable segments were changed from a single segment to two segments: "Automotive Business" and "Financial Services Business." Domestically, sales are conducted through direct sales and a dealer network; overseas, through group companies, trading companies, etc. Thailand, North America, Asia, the Middle East, and Africa are the main overseas markets.

Recent Overview

Revenue increased, but operating profit fell 11.2% year-on-year due to combined effects of US tariffs, Middle East conditions, and rising material costs

In FY2026 (ending March 2026), total unit sales increased to 565,858 units (+42,625 units year-on-year, +8.1%), and revenue rose to ¥3,479,074 million (+7.5% year-on-year). However, operating profit declined to ¥203,703 million (-11.2% year-on-year) due to the combined effects of US tariff impacts, rising material costs, increased growth-related expenses, and a shipment suspension in March caused by conditions in the Middle East. CV unit sales in North America declined sharply to 18,509 units (-8,469 units year-on-year). The Chinese subsidiary Isuzu (China) Engine Co., Ltd. is scheduled to be reclassified from a consolidated subsidiary to an equity-method affiliate effective April 30, 2026. For FY2027 (ending March 2027), operating profit is forecast at ¥260,000 million (+27.6% year-on-year), aiming for a record-high profit level even after incorporating a ¥40.0 billion negative impact from Middle East conditions.

Key Products

Growth Drivers

• Increase in total unit sales: Total unit sales rose to 565,858 units in FY2026 (ending March 2026) (+42,625 units year-on-year, +8.1%), driven by expansion in overseas CV sales mainly in the Middle East, Africa, and Latin America, while LCV sales also increased to 254,219 units (+25,269 units year-on-year), mainly in Africa and Oceania
• Profit increase effect from pricing measures: Increased unit sales and pricing measures functioned as positive factors, with revenue increasing by ¥243,425 million year-on-year
• Increased revenue from Industrial Engines: Industrial Engine revenue rose significantly to ¥127,954 million in FY2026 (ending March 2026) (+¥22,545 million year-on-year, +21.4%)
• Growth in Other revenue (leasing/holding business, etc.): Revenue from parts, services, and the leasing/holding business grew steadily both domestically and overseas, reaching ¥842,759 million (+¥57,725 million year-on-year, +7.4%)
• Expansion of the Financial Services Business: Financial Services Business segment revenue rose to ¥210,750 million (+13.9% year-on-year), with lease receivables and vehicles held for lease balances expanding to ¥409,818 million; Isuzu Financial Services Australia Limited was newly consolidated
• Outlook for performance recovery in FY2027 (ending March 2027): Revenue is forecast at ¥3,700,000 million (+6.4% year-on-year) and operating profit at ¥260,000 million (+27.6% year-on-year), representing a profit-growth plan that incorporates a ¥40.0 billion impact from Middle East conditions
• Positive foreign exchange translation effect: Exchange differences on translation of foreign operations amounted to a positive ¥68,498 million, resulting in a substantial increase in comprehensive income to ¥274,581 million (+49.9% year-on-year)

Risks

• US tariff impact: CV unit sales in North America declined sharply to 18,509 units (-8,469 units year-on-year, -31.4%), and North American revenue fell sharply to ¥164,702 million (-¥60,820 million year-on-year). Uncertainty over tariff policy continues
• Middle East conditions risk: A shipment suspension occurred in March due to reduced demand in Saudi Arabia and conditions in the Middle East, with a ¥40.0 billion negative profit impact already incorporated into the FY2027 (ending March 2027) forecast. Risk of additional shipment suspensions remains if conditions worsen further
• Sluggish Thai LCV market: The domestic Thai LCV market continues to face challenging conditions, with risk of delayed recovery in Thai sales
• Rising material costs, etc.: Continued increases in material costs, etc. are a persistent factor reducing profit, with negative impacts expected to continue into FY2027 (ending March 2027)
• Increase in interest-bearing debt: Interest-bearing debt at the end of FY2026 (ending March 2026) rose to ¥857,402 million (+¥98,557 million from the prior period-end), an increasing trend. The equity ratio (equity attributable to owners of the parent) declined to 40.4% (41.6% at the prior period-end)
• Structural changes in China business: Isuzu (China) Engine Co., Ltd. is scheduled to be reclassified from a consolidated subsidiary to an equity-method affiliate effective April 30, 2026. Responding to structural shifts such as progress in electrification in the Chinese market remains a challenge
• Increase in growth-related expenses: Increased expenses associated with growth investments in autonomous driving, connected services, carbon neutrality, and other areas are pressuring operating profit
• Foreign exchange fluctuation risk: Fluctuations in USD/JPY, AUD/JPY, EUR/JPY, and THB/JPY directly affect business performance. A shift toward yen appreciation poses a risk of pressuring profitability