Volvo Group and Daimler Truck have signed a preliminary agreement to establish a new 50/50 joint venture. The new entity will develop a common software-defined vehicle platform and dedicated truck operating system.
Both companies believe the technology will provide the basis for future software-defined commercial vehicles. The intention is to make the new joint venture a leading developer of standardised hardware and software. This technical basis will then enable Volvo Group and Daimler Truck and potentially other partners to provide differentiating digital vehicle features for its products. Both companies believe these new products will ultimately enhance customer efficiency and experience.
The new joint venture will operate as an independent entity. Volvo Group and Daimler Truck will continue to be competitors in all other areas of business. However, cooperation on digital technology development has become vital to meet development objectives into the transformation towards CO2-neutral drive technologies. In addition to meeting customer expectations within a feasible timeframe.
Combining forces
Martin Lundstedt, Volvo Group President and CEO adds: “Volvo Group and Daimler Truck are two individually great companies. Now we are combining our forces to accelerate the customer benefits that a software-defined truck platform will bring. Given the rapid transformation of our industry, it makes sense to collaborate to accelerate development, increase volumes and share cost.
“Software-defined heavy-duty trucks represent a paradigm shift in the transformation of our industry. We aim to make the truck a programmable device with standardised hardware and operating system for fast product updates. This will give both companies the opportunity to create value for our customers though differentiating digital services and solutions. Partnership is truly the new leadership.”
Martin Daum, CEO of Daimler Truck said, “Just as important as the transformation towards CO2-neutral drive technologies is the digitalisation in the vehicle. Developing a common software-defined vehicle platform with Volvo Group will enable us to turn our vehicles into a programmable device. It will allow us to build differentiating digital vehicle features with significantly greater speed and efficiency for our truck and bus customers around the globe. Together with the Volvo Group we can develop a benchmark truck operating system and set an industry standard.”
The joint venture will be headquartered in Gothenburg, Sweden. It will incorporate existing assets and resources from both companies into the new organisation. The goal of both shareholders is to set the industry standard for a truck operating system and offer its products to other OEMs as well. The joint venture will provide a common developer platform as a service. Customers can then build differentiating software layers. Both companies will provide their own end-user applications on top of the platform to offer differentiating digital vehicle features to their respective customers.
The now-signed preliminary agreement is non-binding. A final agreement is expected within this year, with the goal to close the final transaction in Q1 2025, subject to necessary examination and approvals by the respective authorities.
Enterprise Times: What this means for businesses
As two leading companies in the commercial vehicle industry this announcement is noteworthy. What’s interesting about this new joint venture is that the two parties will remain fierce competitors elsewhere in the sector. Volvo and Daimler Truck will continue to differentiate their complete product and services offerings, including their respective digital solutions. However, Volvo Group and Daimler Truck clearly want to take the lead in the software-defined heavy-duty commercial vehicles. If this new venture helps to enhance customer efficiency and experience, then this announcement should be welcomed. Inevitably, any industry or sector needs market leaders to set the standards for the sector.
Clearly Volvo and Daimler hope this new joint venture will take the lead for technology in the commercial vehicle sector. Moreover, it will be interesting to see how Volvo and Daimler’s competitors respond to the arrival of the new venture.
