Isuzu Motors and Volvo are to form a technological partnership having agreed the sale of Volvo Group’s UD Trucks in a deal worth around £1.8bn.
The deal is expected to be completed in mid-2020 with an alliance also formed between the businesses to enable them to develop and share future advanced technologies.
The partnership is initially expected to focus on heavy trucks, particularly autonomous and alternative fuelled vehicles, with possible collaboration on medium and small trucks. It is said that the technological partnership will help combine expertise and share investment costs as Volvo Group, Isuzu Motors and UD Trucks move forward.
Martin Lundstedt, president and CEO of the Volvo Group said: “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. 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. 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 and representative director of Isuzu Motors.
The announcement of the sale had a positive impact on Volvo shares which saw a rise of around 5% during trading, however, after an initial jump of 3% Isuzu stocks dropped back ending down by more than 5% form their high following the announcement with analysts indicating that the 250bn yen sale price is perhaps too high.