Will partner for medium- and heavy-duty electric vehicles.

Volvo Group and Isuzu Motors signed final agreements to form a strategic, long-term alliance (a minimum duration of 20 years), hinted at in December 2019. Part of the deal is a cooperation on commercial electric vehicles.

Volvo Group is one of the largest manufacturer of trucks and buses, under multiple companies, including Volvo Trucks, Volvo Bus, Volvo CE, Volvo Penta, Renault Trucks and Mack Trucks and UD Trucks.

As part of the deal, the UD Trucks will be acquired by Isuzu Motor for an enterprise value of JPY 243 billion (approx. SEK 20 billion).

We guess that Volvo Group's experience with EVs already implemented by all its brands will be an important asset for Isuzu Motors. The other benefit will be a higher scale of the alliance and new opportunities as - according to the press release - there is great complementarity between the groups from both a geographical and product line perspective.

Let's take a look at the main points of the alliance:

  • 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. The technology partnership encompasses:
    - Joint development by Isuzu Motors and UD Trucks of common platforms for medium heavy-duty truck models for the Japanese- and other Asian markets, utilizing 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 by transferring ownership of the complete UD Trucks business from the Volvo Group to Isuzu Motors. This will accelerate growth by leveraging greater volumes and complementary capabilities, creating significant synergies for Isuzu Motors.
    - As a first step, Isuzu Motors and UD Trucks are discussing the conditions for supply of certain truck variants from UD Trucks to Isuzu Motors from 2022 onwards.
    - To secure smooth business continuation, the Volvo Group will provide transitional services to UD Trucks, and also supply components to UD Trucks.
  • Exploring further opportunities for even broader and deeper collaboration within the commercial vehicle businesses across geographical areas and product lines for future urban logistics solutions. Isuzu Motors is one of the world-leaders in the segment of 3.5 to 15T light and medium-duty trucks with volumes of 252 000 units in 2019.
  • Exploring cooperation in the areas of purchasing and logistics, leveraging common technology, as well as the geographical footprint complementarity and volume expansion.