Buying UD Trucks and allying with Volvo (2020)

Filling the gaps by complement, not by going it alone

The crux of this decision is a choice: to abandon going it alone and to make up for what it lacked through alliance and acquisition. Isuzu, strong in small and medium trucks, buys UD, which holds the heavy segment and an Asian network, and shares the heavy development burden of CASE with Volvo. Where the 1971 tie-up that let Isuzu survive by leaning on GM’s capital left behind a dependence that entrusted business design to the partner, in 2021 Isuzu chose its partner as the buyer and built its own line-up and development structure on its own initiative. In an alliance with an outside party all the same, Isuzu’s standing had reversed.

That said, the UD it took in at an enterprise value of $2.3B (¥243bn) comes with a task of its own — rebuilding earning power. How far CASE technology bears fruit through joint development, and how much a twenty-year contract with Volvo will bind Isuzu’s freedom of action, are questions still to be asked. Even so, the run of moves in 2021 — joining hands again with Hino, which it had cut loose itself in 1942, and bringing UD under its wing — marks a turning point at which Japan’s commercial-vehicle industry is being reassembled from competition into coordination. To draw one’s survival not by chasing scale alone but by choosing with whom, and in what, to complement one another — Isuzu’s choice places that question right in the middle of the commercial-vehicle realignment.