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Toyota and Isuzu put the brakes on capital tie-up

Failed diesel engine project dooms collaboration dating back to 2006

The rise of electric vehicles and toughened environmental regulations in Europe and China pressured the two Japanese companies to abandon their joint effort.   © Reuters

TOKYO -- Toyota Motor and Isuzu Motors announced on Friday that they will end their capital tie-up. Isuzu will buy back all of Toyota's 5.89% stake for 80 billion yen ($720 million).

The two companies formed a capital tie-up in 2006 to develop a 1600 cc diesel engine and build a new factory in Hokkaido, but the project failed to gain traction due to a changing market.

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