TOKYO – Japanese vehicle manufacturer Isuzu Motors and Sweden’s Volvo Motors announced on Wednesday that they have agreed to form a strategic alliance focused on sharing technology and combining their heavy-duty truck production businesses.
The two companies signed a non-binding memorandum of understanding to collaborate for “commercial vehicles in order to capture the opportunities in the ongoing transformation of the industry,” a joint statement said.
The first step of the alliance would aim to establish “a global technology partnership” and create “a stronger and combined” business for the heavy trucks manufactured by Isuzu and UD Trucks, a Japanese brand owned by Volvo.
Volvo would sell UD Trucks to Isuzu Motors to “accelerate growth by leveraging greater volumes and complementary capabilities,” the statement said.
In the future, the companies would explore a “great complementarity between the two groups from both a geographical and product line perspective.”
The alliance would also bring together investments in new technologies and create “best long-term conditions” for the heavy-duty truck business in international markets, as well as for other light and medium duty vehicles.
“Volvo and Isuzu Motors have a well-established relationship on medium-duty trucks in Japan,” said Martin Lundstedt, the president and CEO of the Volvo Group, underling that the alliance has a “great potential” to extend this relationship and promote sales.
President Isuzu Motors Masanori Katayama said both companies “strongly believe in the business opportunities and synergy potential between the two groups,” and that they intended to derive its full value under the alliance.
He said the alliance would help them “to prepare ourselves for the forthcoming logistics revolution.”
Volvo and Isuzu plan to finalize their negotiations over the next few months, aiming to sign the strategic alliance by mid-2020, according to the statement.
With its agreement with Volvo, one of the world’s largest manufacturers of trucks and other heavy-duty vehicles, the Tokyo-based company would replace the capital alliance it had with Toyota until 2018.
The two companies also indicated that their future technology cooperation agreements would be managed through individual contracts.