Volvo Group disclosed this week that it is forming a strategic alliance with Isuzu Motors in order to stay in the vanguard of the commercial vehicle industry. To start with, the two companies will establish a global technology partnership. And Volvo will transfer complete ownership of its subsidiary UD Trucks (formerly known as Nissan Diesel) to Isuzu Motors. Founded in 1935, UD Trucks is one of Japan’s largest manufacturers of diesel trucks and buses.
“The Volvo Group and Isuzu Motors have a well-established relationship on medium-duty trucks in Japan based on mutual respect, shared values and win-win spirit,” says Martin Lundstedt, President and CEO of the Volvo Group. “We see great potential to extend our cooperation within technology, sales and service as well as other areas going forward, for the benefit of our customers and business partners. Our UD Trucks colleagues have done a great job to improve performance in recent years and the alliance opens up a great opportunity to continue the successful journey.”
According to Volvo, UD Trucks is valued at approximately $2.34 billion USD. Volvo expects its net cash position to increase by that amount when the transfer is complete.
Masanori Katayama, President and Representative Director of Isuzu Motors Limited, said the partnership will help both companies prepare for the coming “logistics revolution.”
“Isuzu Motors and the Volvo Group strongly believe in the business opportunities and synergy potential between the two Groups,” Katayama said. “We intend to derive the full value from each other’s different specialties across product and geographical strongholds. Our collaboration will actively contribute to service improvements and strengthened customer satisfaction as well as to prepare ourselves for the forthcoming logistics revolution.”
Below are the main objectives of the new alliance, as articulated by Volvo:
- Forming a technology partnership, which will leverage the parties’ complementary areas of expertise within both well-known and new technologies as well as to create a larger volume base to support necessary, forthcoming technology investments.
• 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.
• Exploring opportunities for even broader and deeper collaboration within the commercial vehicle business across geographical areas and product lines, such as light- and medium-duty trucks.