Companies

Isuzu ties up with Volvo to develop electric vehicles

Reuters Tokyo | Updated on December 18, 2019 Published on December 18, 2019

The Japanese firm plans to buy Volvo’s UD Trucks business

Japan’s Isuzu Motors will buy Volvo AB’s UD Trucks business, which has an enterprise value of $2.3 billion, and tie up with the Swedish firm to cut costs and develop electric and self-driving technologies.

The tie-up is expected to help Volvo better compete with Germany’s Daimler, India’s Tata Motors and China’s Dongfeng Motor. For Isuzu, a maker of small and mid-sized diesel trucks, it would help achieve the goal of developing electric vehicles.

Sweden’s Volvo, which has already begun marketing battery-electric trucks, said the transaction will add to its operating income by about SEK 2 billion ($208 million) and increase its net cash by SEK 22 billion.

Volvo is the world’s fifth-largest truck-making group with brands including Volvo Trucks, Japan’s UD Trucks, France’s Renault Trucks and U.S.-based Mack Trucks.

“Isuzu Motors and the Volvo Group strongly believe in the business opportunities and synergy potential between the two groups,” said Isuzu’s President, Masanori Katayama.

Isuzu shares rose 3 per cent on news of the partnership, which was reported by Japanese newspaper Yomiuri before the companies announced it in a joint statement.

Published on December 18, 2019
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