After Nearly 30 Years, Isuzu Takes Its Last Ride in the States
DETROIT (AdAge.com) -- Adios, Isuzu.
The automaker that brought Americans trucks named Hombre, Amigo and Rodeo -- not to mention the "lying" Joe Isuzu -- is exiting the U.S. next January after a 28-year run. The cause of its death: failure to innovate, misjudgment of the market and woeful under-spending on marketing.
"Isuzu has been comatose for a number of years now," said Charlie Hughes, president of auto consultancy BrandRules.
Even so, its passing will be more than a footnote in advertising history. Once a high-flying brand that helped popularize the now-ubiquitous SUV, Isuzu was put on the map by its big-budget ad blitz featuring actor David Leisure as the plaid-sport-coat-clad Joe who made outrageous claims -- that Isuzu could top 300 mph, for instance. The campaign, created by Della Femina Travisano, New York, in the '80s, is among the best-recalled ever; in 1999, Ad Age ranked it among the top 100 campaigns of the 20th century.
Thanks to that heavily supported effort, which solidified its reputation for dependable, well-priced vehicles, the Japanese automaker hit its peak in 1986, when it sold 127,630 cars and trucks. Had Isuzu pushed that many vehicles last year in the U.S., it would have outsold Infiniti, Volvo, Suzuki, Audi, Hummer, Land Rover, Mini, Porsche and Saab.
Mr. Hughes, who was president of Land Rover North America when it launched Range Rover in 1987, remembers when the Isuzu Trooper was among the most popular SUVs out there. "It was very affordable, and people were flocking to it."
Fast-forward 20 years: In 2007, Isuzu sold 7,098 vehicles.
So what happened? Isuzu made product missteps out of sync with the marketplace and failed to differentiate the brand as competitors flooded into the SUV segment it once popularized, Mr. Hughes said. It bailed out of the car market, raised prices too aggressively and scaled back models until it could no longer compete.
Isuzu's pickups and SUVs were "bulletproof" and less expensive than any other makes in the '80s, said Art Spinella, president of CNW Marketing Research. But the automaker showed poor judgment when it tried to push up its prices in the 1990s -- just as the truck category was swarming with new entries. In 1993, it stopped selling cars in favor of trucks and SUVs. But its price hikes didn't take, and three years later, its annual U.S. sales dropped below 100,000 units for the first time since 1984.
GM scales back
Mr. Spinella also faulted Isuzu for relying too heavily on General Motors Corp., which bought a 37.5% interest in Japan's Isuzu Motors in 1971; the brand came to the U.S. a decade later. But GM lost interest over the years and scaled back its investment -- which was up to a 49% stake in 1998 -- to 12% in 2002.
Distracted by its own problems, GM also scaled back Isuzu product. Today it sells only two models: the Ascender SUV and a small pickup.
Terry Maloney, president-chief operating officer of Isuzu Motors America, cited GM's "prospective cessation of production" of those models as the reason for pulling the plug on its consumer truck sales business in the states.
A spokesman said Isuzu Motors encountered financial difficulties in the late 1990s, though both it and its American arm have been profitable for the last three years. But he said Isuzu couldn't make money in the U.S. going forward because it couldn't get viable vehicles from any source to replace its current lineup. He added, however, that Isuzu wasn't too reliant on GM.
But if you don't have product, you don't need marketing. Mr. Spinella said the company's marketing has been non-existent for at least five years, and new-vehicle shoppers don't even put the brand on their lists.
Isuzu spent a pittance of $2 million in measured media in the first nine months of 2007 and $4 million in all of calendar 2006, according to TNS Media Intelligence, a far cry from the $137 million it spent in measured media for 1998.
In 2002, after some 11 years with Omnicom Group's Goodby, Silverstein & Partners, San Francisco, Isuzu moved its account to retail experts Malone Advertising, in Akron, Ohio. Isuzu's contract with the agency expired Dec. 31; an Isuzu spokesman said it had planned to use Malone on a project basis.