Volvo Group and Isuzu Motors sign final agreements to form strategic alliance recently.
Volvo Group and Isuzu Motors Set to Build Long-term Relationship
The Volvo Group and Isuzu Motors has signed binding agreements to form a strategic alliance within commercial vehicles in order to capture the opportunities in the ongoing industry transformation, in accordance with the Memorandum of Understanding signed in December 2019.
The agreements include Isuzu Motor’s acquisition of UD Trucks from the Volvo Group for an enterprise value of about USD2.3 billion. The transaction is subject to certain conditions, including approval from regulatory authorities.
According to Volvo, the Alliance between the Volvo Group and Isuzu Motors is set to a build long-term and robust relationship. The OEMs are forming a technology partnership, intended to leverage the parties’ complementary areas of expertise within both well-known and new technologies and creating a larger volume base to support investments for world-class technology.
Joint development by Isuzu Motors and UD Trucks of common platforms for medium heavy-duty truck models for the Japanese- and other Asian markets, utilising amongst others Volvo Group technology. Intended cooperation regarding new technologies such as autonomous driving, connectivity and medium- and heavy-duty electrical vehicles. Creating the best long-term conditions for a stronger heavy-duty truck business for UD Trucks and Isuzu Motors in Japan and across international markets are amongst the goals of the alliance.
The Volvo Group and Isuzu Motors will establish a Joint Alliance Office, with facilities both in Japan and Sweden, which will be overseen by an Alliance Board comprising the Isuzu Motors President, the Volvo Group CEO and other key executives from the two groups.
There is great complementarity between the Volvo Group and Isuzu Motors from both a geographical- and product line perspective. The two companies have signed an Alliance Framework Agreement for a minimum duration of 20 years, to take up the possibilities and challenges of the logistics industry of the future, maximizing value and benefits for customers as well as for society.
“I have high expectations on this strategic alliance, which will make Volvo and Isuzu Motors even more competitive within their respective markets and segments. This is an opportunity to share technology investments and also to help each other grow. I am confident that UD Trucks will become a bridge between the Volvo Group and Isuzu Motors and that the strategic alliance will create the conditions to continue to develop UD Trucks to a new level within Isuzu Motors. I also want to express my pride at how the UD Trucks team has been able to serve customers and continue to improve financial performance also during this unprecedented period, characterized by the Covid-19 pandemic. The Volvo Group will continue to support UD Trucks, and participate in the Asian markets through this alliance,” says Martin Lundstedt, President and CEO of the Volvo Group.
“The difficult and unforeseeable Covid-19 situation has made the strategic alliance even more valuable and has built a solid, trustful relationship between Isuzu and the Volvo Group. Our collaboration together with UD Trucks will actively contribute to service improvements and strengthened customer satisfaction as well as supporting the logistics industry through the strategic alliance,” says Masanori Katayama, President and Representative Director of Isuzu Motors Limited.
