Volvo andIsuzuhave signed a non-binding Memorandum of Understanding to form a strategic alliance in the commercial vehicle business.
The partnership will see theVolvoGroup transfer complete ownership of its UD Trucks business globally to Isuzu Motors. This will cost Isuzu Motors approximately $2.3 billion and help it on its course to develop electric and self-driving trucks.
“The Volvo Group andIsuzu Motorshave a well-established relationship on medium-duty trucks in Japan based on mutual respect, shared values and win-win spirit,” president and chief executive of the Volvo Group, Martn Lundstedt, said.
“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.”
In addition to the sale of UD Trucks, the intended strategic alliance will see Volvo and Isuzu form a technology partnership leveraging each parties’ areas of expertise. The companies also want to explore opportunities for even broader and deeper collaboration within the commercial vehicle business, including in the areas of light- and medium-duty trucks.
Signing of binding agreements is expected to occur by mid-2020, with the transaction of UD Trucks expected by the end of 2020. All transactions will be subject to regulatory and other approvals.
“Isuzu Motors and the Volvo Group strongly believe in the business opportunities and synergy potential between the two Groups,” president and representative director of Isuzu Motors Limited, Masanori 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.”