Volvo and Isuzu complete UD transaction


Major piece in international strategic alliance falls into place

Volvo and Isuzu complete UD transaction
UD’s global transfer from Volvo to Isuzu is complete

UD Trucks is now formally part of Isuzu Motors on completion of a JPY243 billion (A$2.88 billion) cash deal with Volvo Group.

The move is a major part of a strategic alliance between the groups and kicks off the broader, technology-centric collaboration.

The partners say the alliance’s work is now entering the next phase to derive potential synergies in areas that will encompass but are not be limited to:

  • Forming a technology partnership, intended to leverage the parties’ complementary areas of expertise within both well-known and new technologies new technologies and creating a larger volume base to support investments for world-class technology
  • Creating the best long-term conditions for a stronger heavy-duty truck business for UD and Isuzu in Japan and across international markets by transferring ownership of the complete UD business from the Volvo to Isuzu
  • 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
  • Exploring co-operation in the areas of purchasing and logistics, leveraging common technology, as well as the geographical footprint complementarity and volume expansion.

Read more about the Isuzu-Volvo partnership, here


More immediately, the partners aim to 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.

The partners have agreed to the alliance having a minimum duration of 20 years.

It is "intended to address possibilities and challenges of the logistics industry of the future, maximising value and benefits for customers as well as for society".

UD Trucks’ revenues for 2020 amounted to JPY261 billion (A$3.48 billion).

The business had a marginally positive impact on the Volvo’s operating income in the same period.

Volvo also stands to gain a Krona1.2 billion (A$180 million) "as an earnout" subject to the performance of UD Trucks during the years 2021-2023.

 

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