By Andrew Ganz
Monday, Dec 22nd, 2008 @ 9:45 am
 
As Toyota attempts to tighten its belt in response to dwindling sales, the automaker announced that it has suspended its joint venture with Isuzu to produce a small diesel powertrain. Toyota had acquired a stake in Isuzu in 2006 primarily for the automaker's diesel expertise. The joint-venture powertrain was set to appear in European Toyotas in 2012.

"A decision was made early this month to suspend the project," a Toyota spokesman told Reuters, citing slumping sales.

The engine was said to be a 1.6-liter diesel and it was expected to be featured in a variety of Toyota vehicles in Europe with North American sales a possibility in the future. Toyota was said to be watching the North American diesel market closely and evaluating whether to import the engine at a later date.

Toyota is said to be reviewing all products in the pipeline as it looks for ways to cut costs.