GM and Japan's Isuzu in talks on truck tie-up

Japan's Isuzu Motors said on Thursday it was in discussions with US giant General Motors on developing next-generation pickup trucks as a report said the two were in talks over a possible tie-up.

The firms have signed an agreement "on launching talks" to develop the vehicles and "will make an announcement at the appropriate time", Isuzu said in a statement without releasing any more details.

The announcement came after Japan's leading Nikkei business daily said the pair would likely reach an agreement later this month on a joint venture.

Under the reported deal, GM will start procuring about 100,000 engines for pickups from Isuzu, while looking to a possible investment in the Japanese firm.

In 2006, GM sold its long-standing minority stake in Isuzu -- most of which was bought by Toyota -- to generate cash as the ailing US automaker was undergoing a massive restructuring.

Last year, reports said Isuzu would spend 30 billion yen ($340 million) on building new factories in China and India to tap rising demand for pickup trucks in the fast-growing markets.

Isuzu shares closed 3.80 percent higher at 545 yen in Tokyo.

Demand for pickups has been growing in many emerging nations, partly due to poor road conditions.