Volvo Group and Isuzu Motors Form a Strategic Alliance

Volvo Group and Isuzu Motors signed binding agreements to form a strategic alliance among commercial vehicles to capture the ongoing industry transformation opportunities.

FREMONT, CA: The Volvo Group and Isuzu Motors have signed binding agreements to form a strategic alliance among commercial vehicles to capture the opportunities in the ongoing industry transformation, according to the Memorandum of Understanding signed in December 2019. The contract consists of Isuzu Motor’s acquisition of UD Trucks from the Volvo Group for an enterprise value of JPY 243 billion. The transaction is subject to certain conditions, including approval from regulatory authorities.

The partnership among the Volvo Group and Isuzu Motors is set to develop a long-term and strong relationship that will encompass but not be limited to:

   •   Starting a technology partnership that intends to leverage the parties’ complementary areas of expertise within well-known and new technologies to develop a more extensive volume base to support world-class technology investments. The technology collaboration contains:

  -   Collaborated development by Isuzu Motors and UD Trucks of familiar platforms for medium heavy-duty truck models for the Japanese- and other Asian markets, used amongst others Volvo Group technology.

  -   Intended cooperation related to new technologies like autonomous driving, connectivity, and medium- and heavy-duty electric vehicles.

•   Developing the best long-term conditions for a more substantial heavy-duty truck business for UD Trucks and Isuzu Motors in Japan across international markets by transferring ownership of the entire UD Trucks business from the Volvo Group to Isuzu Motors. It will increase the growth by leveraging massive volumes and complementary abilities, developing significant synergies for Isuzu Motors.

  -   As an initial step, Isuzu Motors and UD Trucks discuss the circumstances for the supply of specific truck variants from UD Trucks to Isuzu Motors from 2022 onwards.

  -   To protect the smooth business continuation, the Volvo Group will offer transitional services to UD Trucks and even supply components to UD Trucks.

•   Discovering further prospects for even broader and deeper collaboration among the commercial vehicle businesses across geographical locations and product lines for future urban logistics solutions. Moreover, Isuzu Motors is one of the leaders in the segment of 3.5 to 15T light and medium-duty trucks with volumes of 252 000 units in 2019. 

•   Exploring collaboration in purchasing and logistics, leveraging standard technology, and the geographical footprint complementarity and volume expansion.