The Volvo Group and Isuzu Motors signed a binding agreement to their previous strategic alliance to develop commercial vehicle technologies and find new opportunities together. The agreement signed on Oct. 30 between the truckmakers includes Isuzu’s acquisition of Volvo’s UD Trucks.
The agreement follows a December 2019 memorandum of understanding between the OEMs. In the 2020 deal, Isuzu’s $2.3 billion acquisition of UD Trucks from Volvo is expected to close in 2021, subject to regulatory authorities’ approval.
The alliance between the Swedish and Japanese companies aims to build a “long-term and robust relationship,” according to Volvo. The OEMs are forming a technology partnership intended to leverage each company’s areas of expertise within both well-known and new technologies and creating a more extensive volume base to support investments for world-class technology.
“I have high expectations on this strategic alliance, which will make Volvo and Isuzu Motors even more competitive within their respective markets and segments,” said Martin Lundstedt, president and CEO of the Volvo Group. “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.”
Isuzu and UD plan to use Volvo technology in developing common platforms for commercial truck models for the Japanese and other Asian markets. New technologies the companies are pursuing include autonomous driving, connectivity and electric-powered medium- and heavy-duty vehicles.
“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,” said Masanori Katayama, president and representative director of Isuzu Motors Limited. “This long-term partnership will span across products, technologies and regions, and actively contribute to service improvements and strengthened customer satisfaction as well as supporting the logistics industry.”