04.09.2015

Russian Machines and GAZ Group have signed a memorandum of understanding with ISUZU and ITOCHU

Russian Machines Corporation and GAZ Group, parts of Basic Element, one of the largest Russian diversified industrial groups, have signed a memorandum of understanding for joint studies in the field of vehicle engineering, production and sales with a Japanese concern, ISUZU Motors Limited, and an international trade house ITOCHU Corporation.

Russian Machines Corporation and GAZ Group have signed a memorandum of understanding with a Japanese concern ISUZU Motors Limited, and an international trade house ITOCHU Corporation. The memorandum stipulates cooperation of the parties in development and production of vehicles with ISUZU component base for Russian and export markets.

According to the memorandum, the parties will consider the possibility of carrying out joint GAZelle and Sobol vehicles engineering with highly-efficient ISUZU engine for sales in Russia and abroad. GAZ brand vehicles with ISUZU engine would be sold abroad via ITOCHU trade house that has 130 basesin 65 countries.The companies also consider joint engineering of right-hand drive GAZelle vehicles to enter export markets.

Moreover, ISUZU Motors Limited can consider setting up contract manufacturing of ISUZU vehiclesat GAZ Plant.

Another possible field of cooperation could be the development of heavy-duty Ural trucks with the loaded weight of 26-48 t with ISUZU components, which would allow GAZ Group to broaden its product portfolio and enter the new market segment of vehicles to be used both on public roads and off-road.

The parties will also continue the successful cooperation in the bus segment. This year, GAZ Group and ISUZU showed their joint development - new small Vector-3 bus on ISUZU chassis for city and suburban transportation.

Makoto Kawahara, Director of the board andManaging Executive Officerof ISUZU Motors Limited:

-Based on the 4 parties' MOU, ISUZU will study co-develop of future strategic products with GAZ Group by using our world-class clean-diesel engines and world-widely renowned vehicle line-up (Light/Medium/ Heavy-duty trucks, Buses and Pick-up trucks, Sports-utility vehicles) to the current and new products of GAZ Group. The co-developed products shall be competitive, covering not only the Russian domestic market but also the global market. We believe the strategic tie-up among 4 parties enables to make the total products of GAZ Group advanced internationally, with the best assistance provided by the globally competitive R&D teams in ISUZU for covering various needs in developing countries(low emission-controlled markets) and developed countries(high emission-controlled markets.

Vadim Sorokin, President of GAZ Group:

- Cooperation with ISUZU and ITOCHU offers new prospects for GAZ Group in all market segments where our company is present - it's light commercial vehicles, heavy-duty trucks and buses. Our partnership will allow combining the experience of GAZ Group engineers and R&D competence of ISUZU to produce vehicles to broaden product portfolios of both companies, to strengthen positions of our brands in Russia, and to open new export prospects for GAZ Group.

Yoshida Kazutaka, Managing Executive Officerof ITOCHU Corporation:

-Through almost 15-year-long efforts by GAZ Group, ISUZU Motors Limited, and ITOCHU Corporation, the first joint business in bus segment already got realizedsince 2014. We promise to Russain Machines, GAZ group that we,with ISUZU, will do our best to expand this initial project, and also would like to develop any of possible co-business step-by-step in line with the strategy of Russian Machines and GAZ Group. Under the big wave of drastic reorganization and consolidation in the automobile business fields due to more strict safety and environmental regulation and tough competition in a global scale, we deeply recognize the importance of a certain scale merit and the world-class advanced R&D capability in order to survive under the global severe competition. We believe that 4 parties can be the best partners by performing each strength, and also can establish the cooperative partnership through co-development and mutual implementation of products with respect based on the equal footing.

Manfred Eibeck, CEO of Russian Machines Corporation:

- The development strategy of Russian Machines that is aimed at cooperation with global OEM's allows to attract the best global practices and to introduce modern standards of the global automobile industry. The memorandum that is signed with ISUZU and ITOCHU will allow us to make a detailed study of prospective fields of cooperation and to implement joint projects by combining out engineering, production and marketing opportunities for development on the Russian and foreign markets.

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