1st of April 2021 Marked the Official Transfer of UD Trucks to Isuzu Motors

UD Trucks was officially acquired by Isuzu Motors from the Volvo Group on the 1st of April 2021. This move was part of the completion of the strategic alliance between the Volvo Group and Isuzu Motors. There has also been the first round of management changes up top with new members to the UD Trucks board of directors. This is not surprising as these things usually happen when overall control of a company changes hands.

According to the official statement by UD Trucks, Mr. Naoto Hakamata has been appointed Chairman of UD Trucks and Mr. Tetsuya Aiba has been appointed the CFO of UD Trucks effective April 1, 2021. Mr. Joachim Rosenberg, Volvo Group Executive Vice President, resigned as Chairman of UD Trucks Chairman on March 31, 2021. We expect to see a few more changes in due course.

So what does the strategic alliance have in store especially since Isuzu now runs the show at UD Trucks? UD Trucks was previously a Volvo Group company with Japanese roots now back in the hands of another Japanese company. 

According to the press release, UD Trucks is positioned to build a long-term and robust relationship with Volvo Group and Isuzu Motors, and it will benefit from this long term. The opportunities for UD Trucks in this alliance include benefiting from this alliance are:

Leveraging each other's strengths and economies of scale, especially in the area of heavy-duty trucks in Japan and across international markets.

Exploring cooperation in the areas of purchasing and logistics, leveraging common technology, as well as the geographical footprint complementarity

Creating a strong base to continue to invest in technical development and innovations for world-class products and services.

UD Trucks has built up a wealth of experience and expertise in the heavy-duty truck segment over 14 years together with the Volvo Group in the areas of technology, procurement, logistics, production and sales. The company has also made concerted efforts to promote diversity, flexible ways of working, and a global mindset that embraces change.

UD Trucks will continue to fulfill its brand promise of "Going the Extra Mile", and together with Isuzu Motors strive to make life better for people and the planet.

Our Thoughts on the Alliance and What's Happening Locally in Malaysia

It does seem like Volvo Group has basically transferred control of UD Trucks into the hands of Isuzu with the change of the management on top. We expect to see a bit more changes to the management team not stated in here but we do know that even here, UD Trucks Malaysia has since moved its Malaysian head office from the Volvo Trucks Malaysia premises in Shah Alam. 

They are now located in Petaling Jaya and in the midst of setting up their new place but all remains the same with one or two personnel changes and the hiring of a few more people too. Tan Chong Industrial Equipment is still their authorised assembler and distributor here in Malaysia and there should be no change in the near future.

The local arm of UD Trucks is still separate from Isuzu Malaysia and it could be this way for now. Much like how Scania and MAN operates I think, where their ultimate owner is the Volkswagen Group. So, Isuzu and UD Trucks will synergise on a production, parts and design level rather than a sales and service level.

In terms of why this would happen is the fact that commercial vehicles have a long service life and models do not change every 5 to 7 years or so in terms of a total platform change. So the Volvo based 11liter engine heavily used in UD Trucks prime movers will continue to be produced. There is also a need for a stable stock of parts for the next two decades or so. As such, we shall see UD Trucks still utilise Volvo Group technology for a fair bit longer especially since that aforementioned engine actually allows UD Trucks to actually compete with the European makes in terms of the heavy duty segment over Isuzu which seems to have more strength in the light duty and medium duty trucks segment.. 

So what is this alliance then? Most likely Volvo Group has a change in mid to long term goals and a more focused plan. The transfer of UD Trucks to Isuzu actually increases Volvo Group's net cash position to about USD212 Million and would allow them to have more of a safety net for their long term plans (which also includes a heavy investment in autonomous technology and also electrification of their vehicles). So more towards shareholders (the main thing these days, sigh) and more fund to plough into their R&D for a seemingly tougher emissions regulated industry. 

As for Isuzu, they get access into Volvo Group's technology and through UD Trucks, they can also have more of a presence in the heavy duty truck segment with what products UD Trucks have access to. Volvo can just sell their engines and UD Trucks will now sell and market these products with an Isuzu based team running that part of the show. 

What of any overlap in terms of their product lines? There will be bound to have some overlaps here and there in terms of vehicle line-up. Of course, there is also the fact that in some markets Isuzu may be stronger and UD Trucks stronger in another. So there is a juggling act that we shall witness in the next few years. 

The UD Trucks journey has been filled with many changes. From its early days as Nissan Diesel to being under Isuzu now, it shows the fluid nature of business and that nothing ever stays the same even if we want it to.