Report Says Honda, GM To Sign Engine Supply Deal Next Month

TOKYO: Japan's Honda Motor Co. Ltd. and U.S.-based General Motors Corp. group will sign a contract as early as next month for mutual supplies of low-emission engines, a Japanese business newspaper reported Nov. 30. Japan's Isuzu Motors Ltd., an affiliate of General Motors, will supply Honda with diesel engines to be built with the fuel-efficient direct injection technology in its Polish plant starting in 2001, Nihon Keizai Shimbun reported. Two-thirds of Isuzu's engine output in Poland will go to GM's German unit, Adam Opel AG, while the rest will be given to Honda, the daily newspaper said. In exchange, Honda will provide its low-emission gasoline engines for GM cars in the North American market. Neither company would confirm the report. "Aside from Opel, we have been in negotiations with a number of makers in Japan and Europe including Honda about diesel engine supplies in Poland, but we have not reached a deal," an Isuzu spokesperson said. A Honda spokesperson said receiving Isuzu-made engines in Poland was "one of the options" under consideration, saying the carmaker may still develop its own diesel engine or buy from other makers. Nihon Keizai said Honda would put Isuzu's diesel engines on the Civic and Accord models to be produced in its British plant for the European market. Honda wants to avoid massive investment to develop and produce its own diesel engines, while Isuzu wants to put the Polish plant's capacity to full use, the newspaper said.