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Volvo Group Announces Strategic Alliance with Isuzu Motors

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Volvo Group Announces Strategic Alliance with Isuzu Motors

CEO Insights team, Press Release

The Volvo Group and Isuzu Motors sign a non-binding Memorandum of Understanding (MoU) with the intent to form a strategic alliance within commercial vehicles in order to capture the opportunities in the ongoing transformation of the industry.

The MoU is signed with an intention to establish a robust global technology partnership and to create a stronger, combined heavy-duty truck business for Isuzu Motors and UD Trucks in Japan and across international markets. This will entail transferring ownership of the complete UD Trucks business globally from the Volvo Group to Isuzu Motors in order to accelerate growth by leveraging greater volumes and complementary capabilities. There is great complementarity between the two Groups from both a geographical and product line perspective, with further opportunities to be explored over time.

The intended strategic alliance between the Volvo Group and Isuzu Motors will include 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. Appreciating about the relationship Martin Lundstedt, President, CEO, Volvo Group says, “The Volvo Group and Isuzu Motors

“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.



have a well-established relationship on medium-duty trucks in Japan based on mutual respect, shared values and win-win spirit. 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.” Further he adds, “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.”

“Isuzu Motors and the Volvo Group strongly believe in the business opportunities and synergy potential between the two Groups. 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," says Masanori Katayama, President, Representative Director, Isuzu Motors Limited.

The Volvo Group & Isuzu Motors intend to transfer ownership of the complete UD Trucks business globally, which had revenues totalling SEK 24 billion in 2018. The business had a minimal impact on the Volvo Group’s operating income in 2018. All technology cooperation between the Volvo Group and Isuzu Motors will be managed through individual contracts. The MoU is non-binding. The next steps will be finalizing the scope of the business to be transferred, due diligence by Isuzu Motors and negotiations of binding agreements. Signing of binding agreements is expected by mid-2020 and closing of the transaction is expected by the end of 2020. All potential transactions will be subject to regulatory and other approvals.
Source : Press Release

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