Mid-Term Business Plan 2024

(FY2022-FY2024)

May 13, 2021

Isuzu Motors Limited

Overview of Mid-Term BP 2024
Expand current businesses& improve their proﬁtability

Axes of innovation

・Enhance products, sales and services
・Innovate Monozukuri

・Carbon neutral ﬆrategy
・Contribution to logiﬆics evolution as a CV OEM

Outcomes of previous mid-term BP:

Robuﬆ business base & Strategic alliances

Cuﬆomer-oriented approach / Quality well accepted by cuﬆomers

Evolve management from ESG perspectives
・Emphasize shareholder value
・Improve governance & disclosure・Professional group that creates innovation01

Efforts in Previous Mid-Term BP Bore Fruit
Isuzu, regarding this era of profound transformation as a big chance, aggressively led various initiatives.
Isuzu has successfully established business bases stably earning net sales of 2.5 tril. yen or more, and also formed strategic alliances for addressing various challenges in the future.

① Collaborative business innovation
Current businessdeepening② Expand overseas CV business:

improve profitability incore businesses③ Strengthen LCV business
Seven keychallenges

New
engagement
for next generation:
sow the seeds of future
growth④ Enhance powertrain business・Uptime support & collaborative activities bore fruit (JPN CV)
・Set in place Monozukuri & services based on closer-to-market approach, and raised
market shares across the globe (Overseas CV)・Formed a holistic alliance with Volvo Group & acquired UD Trucks (HD truck)・Successfully carried out full model change on LCV (D-MAX/MU-X)
・Established operations to stably supply products at footprints in India &South Africa (LCV)・Entered into a powertrain partnership agreement with Cummins (PT)

⑤ Accelerate advanced technology

・Formed the holistic alliance with Volvo Group (autonomous driving, connected, EV)⑥ Implement digital innovation

・Agreed with Toyota & Hino on collaborations in CASE fields mainly for LD trucks⑦ Create new businesses

・Created new services for logistics customers, utilizing data of cargoes and rearbodies・Promoted collaboration with Honda for HD FCV・Started renewal of mission-critical core IT systems

02

Mid-Term BP Financial Targets
Isuzu will aim to achieve net sales of 2.75 tril. yen and operating income (OPI) of 250 bil. yen for FY2024 ending Mar. 2024.
OPI including synergies with UD Trucks & Volvo Group: expected to include EBITDA of 33 bil. yen for FY2024 and 50 bil. yen for FY2026 ending Mar. 2026.

Mid-term BP target： Net Sales

2,750

： ROE
(unit: bil. yen)

3,000

2,500

300

2,300
250

Operating Income

1,908
170
Average
FY19-21
12.0%

95.7

10.6%

15.0％
12.5%

4.3%
FY’21 ended Mar. ‘21(previous mid-term BP target)

FY’21(incl. pandemic impact)

FY’22 ending Mar. ‘22

FY’24 ending Mar. ‘24

FY’26 ending Mar. ‘26

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Measures to Expand Business & Improve Profitability
Isuzu will address challenges below, fully utilizing the base for growth we built during the past mid-term BP periods.

Measures to implement

Measures contributing to this mid-term BP period(through FY2024 ending Mar. 2024)

Measures contributing to expansion
in FY2025 ending Mar. 2025 & beyond

Collaboration with UD Trucks

Utilize each other’s products & after-sales services networks

Products, sales,and services

LCV business

Expand sales of new LCV models worldwide / Expand sales channels forworkhorse models

Overseas CV business

Get far closer to markets, utilizing networks of Isuzu Group companies

PT business

Expand cuﬆomers globally

Utilize technologies developed by Volvo Group

MD & LD trucks:
Implement full model change during this mid-term BP period
Launch them globally

Synergies with UD Trucks

Collaborate in the ﬁelds of development, logiﬆics, production and purchasing

Monozukuri

HD trucks:
Develop common platform for Isuzu & UD Trucks

LCV production

Leverage 3 production footprints in Thailand, South Africa and India

Inveﬆ in business base in Japan

Renew mission-critical core IT syﬆems
Fujisawa Plant (for subﬆantially more eﬃcient operations)Eﬀects derived from ﬆrategic alliances

CASE area: joint development/Traditional technology area: complement eachother in terms of component units, etc.

Capex

300 bil. yen for 3 years during this mid-term BP
04

Axes of Innovation
As trends toward carbon neutrality accelerate and social expectation for enhanced logistics infrastructure mounts,
it is duty of CV OEMs to respond to these societal issues.

Accelerated trends toward
electriﬁcation/decarbonization

Increased expectation for
uninterrupted logiﬆics infraﬆructure

・Carbon neutrality is the higheﬆ-priority social issue

・Logiﬆics infraﬆructure becomes more & more important

・Trend of passenger cars shifting away from internal combuﬆion engines is
accelerating recently

・Logiﬆics eﬃciency becomes a big social issue

The same expectation will mount in CV space as well

Carbon neutral ﬆrategy
・Firﬆly identify appropriate technologies through demonﬆration experiments
for social implementation of BEV & FCV・Start to launch some models while working on product improvement toward
volume sales
・Continue development of high-eﬃcient ICE (*1) for a period of CN fuels (*2)
being widespread*1 ICE: internal combuﬆion engine*2 CN fuels: carbon neutral fuels such as bio fuels and synthetic fuels derived from renewable energies.

・CV OEMs are required to contribute to addressing these challenges byutilizing connected function and putting autonomous driving to practical use

Contribute to logiﬆics evolution as a CV OEM
・Encourage improved convenience of connected services by making them
OEM-free, preparing for 5G era
・Verify autonomous driving technology under limited use scenarios and seek
to put it to practical use as early as possible05

Carbon Neutral Strategy
Establish a full product lineup by 2040 that is able to deal with carbon neutrality.
Expand sales of EV (*1) models of our major products in the 2030s.

Ratio of ICE vehicles & EV in brand-new CV space (JPN, US, EU)

Fossil fuels

Carbon neutral

Determine appropriate technologies

Expand EV volume-production models &Start volume production for some models

refine them for further spread in society

EV area

Further spread EV use in society & establish product life cycle

2022: start mass-producing LD BEV
2022: selected customers start using HD FCV on experimental basis
Demonstration tests for LD FCV are being discussed within CJPT
(test schedule to be defined)

ICE vehicle area

(*2)

2020

2025

Promote spread of EV use globally?
Development of high-efficient ICE & utilize CN fuels2030*1 EV: electrified vehicles, including battery EV (BEV), fuel cell vehicle (FCV) and hybrid EV (HEV), etc.
*2 ICE vehicles: vehicles powered by fuels such as diesel, gas and CN fuels.

2035

2040

2045

2050

06

Contribution to Logistics Evolution as a CV OEM

1) Connected

Isuzu will seek to contribute to improving customers’ productivity and decarbonization, through strengthening connected services
such as uptime support and operation management tool.

Uptime support
Evolve uptime support services by adding failure prevention function(domain where individual CV OEMs manage development by themselves)

Connected service base

CV connected information platform concept (in Japan)- Leverage collaborative networks of Isuzu & its service sites(incl. UD Trucks)

OEM-free services

Big data (*)

Working with third-party
syﬆems/apps

Services

Operation management (“OM”)
Make vehicle data & communication syﬆems available to third-party
developers of OM syﬆems/apps for logiﬆics induﬆry (domain where
OEM-third party collaboration is openly encouraged)- OEM-free OM syﬆems/apps necessary
Collaborate with other OEMs to create a common platform

Data

Joined by body builders

Start to ﬆudy oncommon platform

Hino/Toyota/Isuzu(open organization)* Big data: data we use as collective intelligence by anonymizing and statistically processing individual data (i.e. information on operation management, traffics, etc.) stored at each company's server.

07

Contribution to Logistics Evolution as a CV OEM

2) Autonomous Driving

Isuzu will accelerate autonomous driving initiatives through co-development with alliance partners.

＜Previous mid-term BP period＞

Teﬆs under various use scenarios

Autonomous driving expertise accumulated

To promote spread of autonomous driving use in actual life scenes

On-highway transportation

Verify eﬀects and safety of unmanned truck operations
and promote them in logiﬆics and other use scenarios

Demonﬆration teﬆ for truck platooning

Expresswaysx
HD trucksPortx
low-speed drive& parkingLevel 4 Demonﬆration teﬆ by UD Trucks

Buses operated
in limited areas

Road sweepers
in urban areas

Urban transportation
Demonﬆration teﬆ for autonomous urbandelivery trucks using NVIDIA technology
Prototype running in the experiment inside Fujisawa Plant

Urban delivery trucks

2030s

Contribute to creating
optimized social
infraﬆructure

Advanced-level demonﬆration teﬆ inside Fujisawa
Plant by end of 2021
Demonﬆration teﬆ in closed space by end of 202208

Evolve Management from ESG Perspectives
Evolve management culture upon benchmarking global leading manufacturers.

Norm change

In the new era

Cross-induﬆry competition/collaboration becomes the norm.
Stakeholders also become diversiﬁed and globalized.

To be accepted by society and survive this new era,
we muﬆ evolve our management from ESG perspectives.

Emphasize shareholder value

Improve governance & disclosure

Capital eﬃciency:

Transition of corporate governance ﬆructure to:Returns to shareholders:Composition of BOD:

ROE target: 15% for FY2026 ending Mar. 2026

Payout ratio target (average during this BP period): 40％
Stock buybacks, depending on situations of inveﬆments/funds

A company with an audit & supervisory committee

One-third or more to be composed of external directors

Protection/use of intellectual property:

Build eﬀective syﬆems (for ﬆrategic alliances)

Improvement of disclosure:

IR/Non-ﬁnancial information (ESG)

Professional group that creates innovation
Diversity:

Reinforce enterprise-wide power by promoting ISUZU talents who havediverse point of view, perception, capability and expertise.

Organization/Communication:

Transform into agile organization by enhancing of HR platform throughhuman capital development and by increasing mobility of individuals &teams.

Accounting ﬆandard:

Prepare for adoption of IFRS

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Overview of Mid-Term BP 2024 (Shown Again)
Expand current businesses& improve their proﬁtability

Axes of innovation

FY2026 ending Mar. 2026: target net sales of 3 tril. yen & OPI of 300 bil. yen

Focus on social duties CV are required to fulﬁll

・Enhance products, sales and services

・Carbon neutral ﬆrategy

・Innovate Monozukuri

・Contribute to logiﬆics evolution as a CV OEM- Continue ﬆeady eﬀorts- Fully leverage ﬆrategic alliances- 10-year preparation for shifting to carbon neutrality- Thoroughly pursue collaborative creation activity with cuﬆomers

Outcomes of previous mid-term BP:

Robuﬆ business base & Strategic alliances

Cuﬆomer-oriented approach / Quality well accepted by cuﬆomers

Evolve management from ESG perspectives
Transform ourselves to survive the era of profound transformation

・Emphasize shareholder value - Be responsible for creating proﬁts & funds
・Improve governance & disclosure - Get truﬆed by ﬆakeholders

・Professional group that creates innovation - Be able to fully address changes & diversity
10Challenges toward Establishing Sustainable Management

Isuzu will always mean the beﬆ

A leader in transportation, commercial vehicles and diesel engines, supporting our cuﬆomers and respecting the environment

Climate change and economic growth

Productivity growth of logiﬆics induﬆry

Logiﬆics commutation(declining working population)(resolve traﬃc accident/congeﬆion)

Societal issues Isuzu wants to solve
through its business activities
Economic growth in emerging economies

Protect living condition/Protection at disaﬆer and emergency

Isuzu will aim to grow suﬆainably, surviving the era of profound transformation and solving societal issues.

11Sales Volume & Financial Indicators

Sales volume (k units)

FY’21

FY’22

Mid-Term BP
FY’23

FY’24

Ended Mar. ’21

Ending Mar. ’22

Ending Mar. ’23

Ending Mar. ’24

CV abroad

190

253

243

281

Induﬆrial engines

136

158

136

145

CV in JapanLCV

of which CV sold by UD Trucks (k units)

CV in JapanCV abroad

Inveﬆment/ﬁnancial forecaﬆ (B Yen)

Development expenses
Capex

70

295

FY’21

86

395

81

443

78

448

9

8

8

FY’22

FY’23

FY’24

7

8

9

Ended Mar. ’21

Ending Mar. ’22

Ending Mar. ’23

Ending Mar. ’24

70

100

100

100

91

110

115

115

Intereﬆ-bearing liabilities

112

380

320

260

Equity ratio

46%

43%

46%

48%

(excl. lease-related ones)

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Notice to The ReadersThis document is intended for informational purposes and includes, but not limited to, statements on future business performance and business plans. Information contained in the document,
other than historical or current facts, constitutes forward-looking statements which are based on assumptions and judgments formed by the management of the Company in view of information
currently available. By its nature, Isuzu does not guarantee or give any warranty as to the accuracy of all information contained in this document. Moreover, Isuzu undertakes no obligations to
update such forward-looking statements such as statements on future business performance and business plans, based on future events or new information.
Such statements involve elements of risk and uncertainty contained in such assumptions and judgments, and/or various factors including but not limited to economic changes in future, changes in
automotive market conditions, foreign currency exchange rate fluctuations, and changes of business environment surrounding the Company. Such elements and/or factors may therefore cause theactual results and performance to be materially different from any future results and performance expressed or implied by the predictive statements stated herein. If you actually have an intention
to invest, you should not depend upon this document as your sole source of information, and should use your own discretion in making an investment decision.
Please be aware that Isuzu will not be responsible for any damages you may suffer as a result of making an investment decision based on the information contained in this document.

Copyrights
Isuzu Motors limited or the original rights holders retain copying and other rights associated with these materials. Copying and otherwise reusing these materials in any way without prior consent
is prohibited.
13

(Appendix 1) Review on Previous Mid-Term BP - Promotion of Collaborative Creation Activity
Isuzu led initiatives to create new values with customers and best partner firms in each business/technology segment.

Process toward eﬆablishing new solutions

Collect data on problems facing society/cuﬆomers
Examples of issues facing society & cuﬆomers:
Environmental preservation · Driver shortage · Room for improving transport eﬃciency· Issues facing those with limited availability of transport means ····

Examples25-m-long double-trailer truck

Eﬆablish new solutions & expand sales

Implement PoC
Collaborative creation/

Brainﬆorm ideas
for new solutions

Trial & Error

・Made available specialized full tractor models
compatible with full trailers by external body builders,
contributing to advancement of sharedtransportation initiatives using the double-trailer
model by some logiﬆics companies in Japan・With permitted routes & areas expanding, it hascontributed to improved eﬃciency through masstransportation, as well as to labor saving

LD EV trucks in experimental use
・EV trucks contribute to reduction of CO2 released
while vehicles are used in its lifecycle

Collaborate with
cuﬆomers to create values

Reﬁne ideas

・Employing a walk-through interior ﬆructure enablinga driver to move from the driver seat to the rear bodywithout getting oﬀ, EV trucks are expected tocontribute to enhancing user-friendliness* Photos above for illuﬆrative purposes only

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(Appendix 2) Review on Previous Mid-Term BP
Sales Regions & Dominant Market Share Countries in 2020
(Based on sales figures compiled by Isuzu)

Isuzu achieved No.1 market shares in 45 countries/regions, including Japan, Thailand, Australia and Hong Kong.

UkraineBuses (GVW 3.5 tons & over)TurkeyM/D Trucks (GVW 6.5-16 tons)

CyprusPickup Trucks (Payload 1 ton)

IsraelM/D Trucks (GVW 9.5 -12 tons)
L/D Trucks (GVW 6.1-9.5 tons)

Jamaica

Malta

CanadaPickup Trucks (Payload 1 ton)TunisiaJapan

CV (GVW 3.5 tons & over)Pickup Trucks (Payload 1 ton)

Egypt

L/D Trucks (GVW 4-9 tons)
L/D Buses (15-18 seats)
Pickup Trucks (Payload 1 ton)

UgandaBuses (Over 40 seats)

Gabon

L/D Trucks (GVW 3.5-9 tons)
M/D Trucks (GVW 9-16 tons)

Kenya

Trucks & Buses (GVW 3.5 tons & over)
M/D Buses (21-40 seats)
H/D Buses (Over 40 seats)
L/D Trucks (GVW 3.5-9.8 tons)
M/D Trucks (GVW 9.9-19 tons)
Pickup Trucks (Payload 1 ton & over)South Africa

PakistanCV (All categories)

MyanmarCV (GVW 2 tons & over)Cambodia

CV (All categories)

ThailandCV (Payload 2 tons & over)
H/M/D Trucks (Payload 6 tons & over)
L/D Trucks (Payload 2-3 tons)
Pickup Trucks (Payload 1 ton & over)

Malaysia

CV (GVW 3 tons & over)Australia

Trucks (GVW 3.5 tons & over)CV (GVW over 3.5 tons)
PPV (Passenger Pickup Vehicles)

L/D Trucks (GVW 3.5-7.5 tons)

Trucks (Payload 1.5 tons & over)CV (Payload 2-5 tons)

All classes (GVW over 3.5 tons)

Réunion Island
Mauritius

L/D Trucks (Payload 2-3 tons)
M/D Trucks (Payload 4 tons)
H/D Buses (Overall W 2.5 m class)Hong Kong

L/D Trucks (GVW 3.5-5.5 tons)
M/D Trucks (GVW 5.5-24 tons)
H/D Trucks (GVW 24-38 tons)
Pickup Trucks (Payload 1 ton & over)Philippines

CV (GVW over 3 tons)

Papua New Guinea

H/D Trucks (Payload 5 tons & over)
L/D Trucks (Payload 1-5 tons)

Cab-over Trucks classes 3-5

USA

Cab-over Trucks US GVW classes 3-5

MexicoCab-over Trucks class 3

BelizeCV

Honduras
CV

CV

Dominican Republic
CV

CuraçaoCV

Martinique

L/D Trucks (GVW 3.5-7.5 tons)

GrenadaPickup Trucks (Payload 1 ton)CV

Barbados

Costa Rica

Pickup Trucks (Payload 1 ton)

PanamaCV

Ecuador

L/D Trucks (GVW 3 tons or more and less than 10 tons)

Colombia

CV

CV

St. Lucia

CV

Trinidad and Tobago

Pickup Trucks (Payload 1 ton & over)Paraguay

L/D Trucks
M/D Trucks
L/D Buses

Fiji

Peru

New Zealand

Chile

CV

L/D Trucks (GVW 3.5 tons or more and less than 10 tons)

Note: CV: Commercial vehicles (trucks & buses)
L/D: Light-duty

Sales regions

M/D: Medium-duty

H/D: Heavy-duty

Dominant market share countries

15

(Appendix 3) Review on Previous Mid-Term BP - LCV Full Model Change
Isuzu successfully made its pickup trucks more competitive through full model change, producing the high-spec new model & previous
models as workhorse at its footprints in Thailand, India and South Africa and expanding their sales globally, to satisfy each local needs.
Isuzu also launched the new model-based derivative and OEM product, making its future profit base more robust.

Expanded pickup truck cuﬆomer baseHigh specs

CV useCV & PC use

PC useNew pickup truck model (since Oct. 2019)

Cuﬆomers for
new model

Sold ﬁrﬆ in Thailand, it logged record sales volume in Dec. 2020

OEM Supply

Supply to MAZDA under OEM
contract ﬆarted (since Aug. 2020)

Cuﬆomers using
pickup trucks
as workhorseIndia
Coﬆ-reduced previous models

New PPV (since Nov. 2020)

Sold ﬁrﬆ in Thailand,
where good sales already recorded,
it is being launched globally toother markets

Conventional
cuﬆomer baseStandard
specs

Derivative

ThailandFused MAZDA’s SOULof MOTION designconcept into the new
pickup truck model

South Africa

16

(Appendix 4) Review on Previous Mid-Term BP - Completion of Forming Strategic Alliances
Isuzu aggressively formed strategic alliances with best partner companies in each business/technology area,
and completed an alliance formation which enables us to address various future challenges.

Deepen current businesses

Electriﬁcation

New engagement for next generation

Autonomous driving

Connected

HD

LD

Isuzu Group Area
17

(Appendix 5) Review on Previous Mid-Term BP - Quantitative Targets
Main reasons for failure to achieve quantitative targets were: (1) sluggish demand in emerging markets, (2) foreign exchange
rate fluctuations (emerging nations’ currencies depreciated while Thai baht appreciated), and (3) impact of the Covid-19 pandemic.

Previous mid-term BP target
FY2021 ended Mar. 2021

Results
FY2021 ended Mar. 2021

Diﬀerence

Net sales

2,300 bil. yen

1,908 bil. yen▲392 bil. yen

Operating income

207 bil. yen

96 bil. yen▲111 bil. yen

OPI variation(unit: bil. yen)

Target(FY2021)207

Vol/Mix
▲107

Forex
▲23

Fixed coﬆ
reduction+19

Results(FY2021)96
18