TOKYO: Isuzu Motors last week said it was in discussions with General Motors (GM) over the development of next-generation pickup trucks as a report said the two were in talks over a possible tie-up.

The firms have signed an agreement “on launching talks” to develop the vehicles and “will make an announcement at the appropriate time,” Isuzu said in a statement, without releasing any more details.

The announcement came after Japan’s leading Nikkei business daily said the pair would likely reach an agreement later this month on a joint venture. Under the reported deal, GM will start procuring about 100,000 engines for pickups from Isuzu, while looking to a possible investment in the Japanese firm.

In 2006, GM sold its longstanding minority stake in Isuzu—most of which was bought by Toyota—to generate cash as the ailing carmaker was undergoing a massive restructuring. Last year, reports said Isuzu would spend $340 million on building new factories in China and India to tap rising demand for pickup trucks in the fast-growing markets.

Demand for pickups has been growing in many emerging nations, partly because of poor road conditions.