Sustainability Report 2019 Contents

UD Trucks: A history of innovation 2 Message from the President 4 ‘Fujin & Raijin. Vision 2030.’ Our innovation roadmap 5 UD Trucks and Sustainability 11 Providing trucks the world needs Sustainability Activities Customers 13 Business partners 19 since Employees 21 Community engagement 25 1935 Environment 27 UD Trucks was founded by Kenzo Adachi in 1935 with CSR, Compliance and Corporate the mission “to make the trucks the world needs Governance 33 today.” We’ve continued to develop advanced About UD Trucks Corporation 35 technology, products, and services ever since, About the Volvo Group 36 providing the transportation solutions our customers need. UD stands for Ultimate Dependability, and is at the core of everything we do.

About this report UD Trucks issues its Sustainability Report each year for the purpose of providing stakeholders with information about its social and environmental initiatives, including its future vision for sustainable innovation in the logistics industry.

Scope of the report This report covers the activities of UD Trucks Corporation primarily in Japan. Some sections also cover the Company’s activities in other countries.

Reporting period This report mainly covers results and activities in scal 2018 (January 1 to December 31, 2018). Some sections also refer to results and activities in previous scal years, activities in scal 2019, and future plans and forecasts.

Published December 2019

1 UD Trucks: A history of innovation

In 1932 and 1933, the companies that would one day be Nissan and Toyota were founded. Most of the demand at this time was for trucks, supporting the growth of industry, although cars were also developing The LD1, the company’s rst diesel truck rapidly.

1935 1935 Founding of Nihon Diesel Industries, Ltd., predecessor to UD 1968 1968 Trucks, by Kenzo Adachi in Contract signed with Chrysler to Kawaguchi, Saitama, to export UD engines to the US—a rst The opening of two major manufacture diesel engines for a Japanese truck manufacturer at expressways in 1965 and the time 1969 made road transport more practical than ever. Japan’s truck manufacturers developed high-powered engines to meet soaring demand, ushering in an age of high-speed, high-volume transportation.

1962 1971 Opening of Ageo Plant Development of PD6T, Japan’s rst 1938 turbocharged diesel engine with Development of rst diesel engine direct injection 1960 1960 Company renamed Nissan Diesel 1975 1975 Motor Co., Ltd. Launch of the medium-duty truck Condor

1958 Launch of Japan’s rst 6TW-model truck with a payload of more than 10 tons, later used in the construction of the Shinkansen network

1955 1955 Launch of UD engine, a high-powered 1939 1939 and lightweight diesel engine Completion and legendary 3,000 km test drive of rst diesel truck 1989 Release of Traf c Eye, the world’s rst commercialized radar laser collision prevention system

Development of world’s rst closed-loop controlled variable nozzle turbocharger

After World War II, automobile manufacturing was initially prohibited by the US occupying forces. Before long, however, the ban was lifted for trucks to help with reconstruction. By the end of 1945, Japan’s World’s rst (for medium- and heavy-duty trucks) automakers were racing to Japan’s rst (for medium- and heavy-duty trucks) develop new engines.

2 84 years of history Founded in 1935 as a manufacturer of diesel engines, UD Trucks has always striven to meet the changing needs of society. The drive to overcome new challenges is in our DNA. As climate change, demographic shifts, urbanization, and technical 2007 innovation intensify around Company joined Volvo Group the globe, new solutions like autonomous driving, 2004 2004 electromobility, and 6,188 employees* Launch of Quon, UD Trucks’ connectivity attract We believe that employee diversity and a agship heavy-duty truck and world’s attention. rst truck with urea SCR system for workplace where everyone can exercise his cleaner emissions or her individual talents to the utmost is 2010 2010 the key to a productive and sustainable World’s rst truck with knee Company renamed UD Trucks workforce. Our workforce includes people airbags and knee protectors Corporation from 25 countries in Europe, Asia, Africa, Oceania, and the Americas. Launch of UD Information * Within Japan. Figure includes contract and temporary Service, Japan’s rst remote employees. As of December 31, 2018. diagnostic service 2013 2013 Launch of Quester, a brand new heavy-duty truck developed for global growth markets 20,636units sold globally in ﬁscal 2018 2002 We sell our trucks all over the world, with Introduction of Japan’s rst Japan as our main market. In each market, heavy-duty CNG engine in the we offer a wide range of transport solutions Big Thumb based on local needs.

Development of world’s rst Global sales volume (Thousands of vehicles) capacitator hybrid truck 2014 2014 21.6 Launch of light-duty truck Kazet 19.8 20.4 20.2 20.6 1998 Development of GE13, Japan’s Completion of merger with sales rst engine with electronically company, UD Trucks Japan controlled unit injectors Corporation 2014 2015 2016 2017 2018 1997 Introduction of Japan’s rst electric braking system (EBS) for heavy-duty trucks 1996 National service network of Introduction of Japan’s rst 2015 medium-duty CNG engine in customer the Condor 80th anniversary of company’s founding 165 centers 1995 (including independent dealers) Introduction of ESCOT, Japan’s 2017 2017 rst electrically controlled automated Launch of new Quon and Condor, manual truck transmission as well as medium-duty Croner and light-duty Kuzer for global 1990 1990 growth markets Launch of Big Thumb, offering lower Sales and servicing in over emissions and improved comfort and safety 60countries The 1990s were an age of rising environmental In Japan and around the world, we offer awareness across the world. quality service through our extensive In Japan, new restrictions network. Our telematics service monitors on nitrogen oxide emissions 60,000 trucks across Japan, and we offer were nalized in June 1992 client business 24-hour, 365-day support. and came into force in December of the same year.

3 Towards 2030 Leading the way with sustainable transportation solutions Japan’s logistics industry is currently facing various challenges, including a shortage of drivers amid the growing popularity of online shopping services, as well as upwardly trending fuel prices and increasingly strict environmental regulations. For UD Trucks to help the industry overcome these challenges and continue to grow, I believe that two basic approaches are essential. First, regardless of how the business environment changes, we must maintain an unwavering commitment to the principles that UD Trucks was founded on over a history spanning more than eight decades. That means staying true to the vision of the Company’s founder, Kenzo Adachi, “to make the trucks the world needs today.” Indeed, UD Trucks has provided countless technical innovations to the logistics industry—the lifeblood of society—and will continue passing down the Company’s founding principles and traditions going forward. Second, we must move forward with a long-term vision. The automotive industry— commercial vehicle manufacturers included—is currently developing autonomous and electric vehicles as solutions for connectable and smarter logistics. To help accomplish these objectives, the Volvo Group will need to harness its collective capabilities and work with stakeholders to nd the best solutions. Toward that end, UD Trucks created an innovation roadmap called ‘Fujin & Raijin. Vision 2030.’ in April 2018, laying out speci c goals and innovative processes leading up to 2030. Combining our founding principles and long-term vision, UD Trucks strives to be a leader in sustainable transportation solutions.

Takamitsu Sakamaki President and Representative Director

4 ‘Fujin & Raijin. Vision 2030.’ Our innovation roadmap

2030 Mass production of fully electric autonomous trucks

2020 Commercialization of autonomous driving in con ned areas Raijin Fujin 2019 Autonomous driving trials with customers, partners and other stakeholders

2018 Public demonstration of Level 4 autonomous driving using heavy-duty trucks

Transport is key to our social infrastructure, helping people and communities thrive. At UD trucks, our mission is to reshape transportation through creative thinking and innovation to help build the sustainable societies of tomorrow.

The transport industry faces many challenges: climate change, resource depletion, ageing populations, driver shortages, and safety concerns. The prosperity of future generations will depend on innovative technology, products, and solutions like autonomous driving, electromobility, and connected vehicles. We call this “smart logistics.”

In April 2018, we unveiled a new roadmap for innovation that will guide our efforts through the next decade and beyond—‘Fujin & Raijin. Vision 2030.’

5 6 ‘Fujin & Raijin. Vision 2030.’ Our innovation roadmap

2030 Mass production of fully electric autonomous trucks

2020 Commercialization of autonomous driving in con ned areas Raijin Fujin 2019 Autonomous driving trials with customers, partners and other stakeholders

2018 Public demonstration of Level 4 autonomous driving using heavy-duty trucks

In April 2018, we unveiled a new roadmap for innovation that will guide our efforts through the next decade and beyond—‘Fujin & Raijin. Vision 2030.’

5 6 Our 2030 Vision Pioneering new innovation and thereby contribute to a more ef cient hybrid systems. Connectivity and digitalization also possibilities and sustainable transport system to meet tomorrow’s support smart logistics, including autonomous challenges. driving and electromobility. As a pioneer in this eld, In April 2018, we announced our innovation UD Trucks uses telematics to connect more than Douglas Nakano roadmap—‘Fujin & Raijin. Vision 2030.’ 60,000 trucks. Senior Vice President of Technology * The Japanese government uses ‘Society 5.0’ to indicate initiatives to enhance the quality of life and boost productivity Employees at the heart of our vision through innovation in what may be called the fourth Bene tting our customers and society is central to our industrial revolution, characterized by arti cial intelligence, robotics and IoT, among other disruptive technologies. Fujin & Raijin innovation roadmap. Our employees are at the heart of executing our vision of the future. My Milestones for tomorrow job is to support our people on this journey. ‘Fujin & Raijin. Vision 2030.’ is our innovation At the Tokyo Motor Show 2019, under the theme roadmap for the commercialization of autonomous of “Innovation for Smart Logistics,” we are trucks and fully electric trucks by the year 2030. Fujin encompassing technologies for Today, Tomorrow, is the Japanese god of wind; Raijin the god of achieved through collaborative efforts with partners and the Future towards 2030. While focusing on thunder. Fujin symbolizes the power of movement from both the private and public sectors. (More on what we can do today, we are always considering (automation) and Raijin the power of energy page 10) how we can meet customer needs and society (electromobility). expectations in the years to come. Automation and electromobility are key to making Leveraging the power of the Volvo Group By the same token, this means we can never be logistics more sustainable. As illustrated on page 6, By combining the strengths of UD Trucks and the satis ed and must strive to exceed the expectations of our innovation roadmap takes a step-by-step Volvo Group, we can deliver more value for our our customers and all stakeholders. We will continue approach together with customers to offer solutions customers. The Volvo Group’s CAST platform to expand and solidify our position as an innovator for select automation and electromobility applications (Common Architecture & Shared Technology), for and pioneer for sustainable transportation solutions. from 2020, moving towards full-edged example, offers an extensive array of core commercialization by 2030: technologies for the development of vehicles across Solutions the world needs today The most pressing problem faced by Japan’s Most of us depend on logistics to enable the 1) Level 4 autonomous driving demonstrations using the Volvo Group. Since our inception, UD Trucks has been committed logistics industry today is a shortage of skilled drivers, lifestyles that we take for granted. heavy-duty trucks; UD Trucks, in turn, has a solid understanding of to providing trucks and services that the world needs coupled with the rapid growth in e-commerce Reshaping the logistics industry to be more 2) Customer trials of Level 4 autonomous driving with customer preferences in Japan and other today. Numerous world rsts by UD Trucks have deliveries. Compounding the situation are ef cient, sustainable and people-centric through heavy-duty trucks; predominantly Asian markets. Our global R&D team, supported the technological advancement of the ever-stricter environmental regulations and upward innovation is the primary mission for UD Trucks and 3) Commercialization of autonomous driving in numbering 850 (approximately 500 in Japan and 350 automotive industry. trending fuel prices. the Volvo Group as a whole. We have a responsibility con ned areas . overseas), develops UD branded products in line with to do this, and to lead the way. This roadmap goes beyond re ning our existing market needs. Our efforts also bode well for ‘Society 5.0,’ a technologies in house. We cannot do this alone UD Trucks ultimately decides what products to Global positioning system (GPS) Japanese government initiative, which positions and will seek new partnerships to provide make and which technologies to employ. Taking This system enables the truck to drive on autonomous driving as a bene t for society—from solutions for tomorrow. advantage of CAST, UD Trucks works closely with a designated route by using GPS. An even reduced congestion and environmental impacts, to Making autonomous and electric trucks an integral engineers at Volvo Group headquarters, while working more advanced network-based RTK-GPS (Real Time Kinematic GPS) was used in improved safety and convenience.* part of our transportation infrastructure requires to develop our own technologies for speci c markets. the trial in Hokkaido. With the introduction of the heavy-duty Quon in broad collaboration with relevant stakeholders. We We combine the Volvo Group’s strengths with our 2017, UD Trucks has focused on supporting smart must work with the transport companies who actually own technology in many areas. For automation, this logistics—products and services that enhance fuel use our products in their operations and coordinate includes object recognition using onboard cameras, economy, environmental performance, drivability, with regulatory agencies, not to mention suppliers. radar and LIDAR (Laser Imaging Detection and Advanced technologies featured in safety, uptime and productivity. We optimize these In order to incorporate the most innovative Ranging), in addition to incorporating decision-making the heavy-duty truck used in the products and services to the needs of our customers in technologies, we anticipate new business relationships software algorithms and vehicle control mechanisms autonomous driving demonstration the form of transport solutions. Our success in this area will form. Clarifying our vision and mission is essential for steering systems, brakes, and engines. Equipped with Level 4 autonomous 3D Laser Imaging Detection and driving technology (currently permissible Ranging (LIDAR) is backed up by the loyalty of our customers, and our to building long-lasting partnerships with such new To develop electric vehicles tailored to customer in con ned areas), the truck can drive This technology helps ensure safe reputation for excellence in innovation and reliability. stakeholders. In August 2019, our L4 autonomous needs, we are working on optimal solutions ranging autonomously on precisely designated self-driving by detecting the presence of In short, our vision is to be a leader in truck driving trial in Hokkaido showed what can be from battery electric vehicle (BEV) systems to serial routes while detecting oncoming objects. oncoming objects.

7 8 Our 2030 Vision Pioneering new innovation and thereby contribute to a more ef cient hybrid systems. Connectivity and digitalization also possibilities and sustainable transport system to meet tomorrow’s support smart logistics, including autonomous challenges. driving and electromobility. As a pioneer in this eld, In April 2018, we announced our innovation UD Trucks uses telematics to connect more than Douglas Nakano roadmap—‘Fujin & Raijin. Vision 2030.’ 60,000 trucks. Senior Vice President of Technology * The Japanese government uses ‘Society 5.0’ to indicate initiatives to enhance the quality of life and boost productivity Employees at the heart of our vision through innovation in what may be called the fourth Bene tting our customers and society is central to our industrial revolution, characterized by arti cial intelligence, robotics and IoT, among other disruptive technologies. Fujin & Raijin innovation roadmap. Our employees are at the heart of executing our vision of the future. My Milestones for tomorrow job is to support our people on this journey. ‘Fujin & Raijin. Vision 2030.’ is our innovation At the Tokyo Motor Show 2019, under the theme roadmap for the commercialization of autonomous of “Innovation for Smart Logistics,” we are trucks and fully electric trucks by the year 2030. Fujin encompassing technologies for Today, Tomorrow, is the Japanese god of wind; Raijin the god of achieved through collaborative efforts with partners and the Future towards 2030. While focusing on thunder. Fujin symbolizes the power of movement from both the private and public sectors. (More on what we can do today, we are always considering (automation) and Raijin the power of energy page 10) how we can meet customer needs and society (electromobility). expectations in the years to come. Automation and electromobility are key to making Leveraging the power of the Volvo Group By the same token, this means we can never be logistics more sustainable. As illustrated on page 6, By combining the strengths of UD Trucks and the satis ed and must strive to exceed the expectations of our innovation roadmap takes a step-by-step Volvo Group, we can deliver more value for our our customers and all stakeholders. We will continue approach together with customers to offer solutions customers. The Volvo Group’s CAST platform to expand and solidify our position as an innovator for select automation and electromobility applications (Common Architecture & Shared Technology), for and pioneer for sustainable transportation solutions. from 2020, moving towards full-edged example, offers an extensive array of core commercialization by 2030: technologies for the development of vehicles across Solutions the world needs today The most pressing problem faced by Japan’s Most of us depend on logistics to enable the 1) Level 4 autonomous driving demonstrations using the Volvo Group. Since our inception, UD Trucks has been committed logistics industry today is a shortage of skilled drivers, lifestyles that we take for granted. heavy-duty trucks; UD Trucks, in turn, has a solid understanding of to providing trucks and services that the world needs coupled with the rapid growth in e-commerce Reshaping the logistics industry to be more 2) Customer trials of Level 4 autonomous driving with customer preferences in Japan and other today. Numerous world rsts by UD Trucks have deliveries. Compounding the situation are ef cient, sustainable and people-centric through heavy-duty trucks; predominantly Asian markets. Our global R&D team, supported the technological advancement of the ever-stricter environmental regulations and upward innovation is the primary mission for UD Trucks and 3) Commercialization of autonomous driving in numbering 850 (approximately 500 in Japan and 350 automotive industry. trending fuel prices. the Volvo Group as a whole. We have a responsibility con ned areas . overseas), develops UD branded products in line with to do this, and to lead the way. This roadmap goes beyond re ning our existing market needs. Our efforts also bode well for ‘Society 5.0,’ a technologies in house. We cannot do this alone UD Trucks ultimately decides what products to Global positioning system (GPS) Japanese government initiative, which positions and will seek new partnerships to provide make and which technologies to employ. Taking This system enables the truck to drive on autonomous driving as a bene t for society—from solutions for tomorrow. advantage of CAST, UD Trucks works closely with a designated route by using GPS. An even reduced congestion and environmental impacts, to Making autonomous and electric trucks an integral engineers at Volvo Group headquarters, while working more advanced network-based RTK-GPS (Real Time Kinematic GPS) was used in improved safety and convenience.* part of our transportation infrastructure requires to develop our own technologies for speci c markets. the trial in Hokkaido. With the introduction of the heavy-duty Quon in broad collaboration with relevant stakeholders. We We combine the Volvo Group’s strengths with our 2017, UD Trucks has focused on supporting smart must work with the transport companies who actually own technology in many areas. For automation, this logistics—products and services that enhance fuel use our products in their operations and coordinate includes object recognition using onboard cameras, economy, environmental performance, drivability, with regulatory agencies, not to mention suppliers. radar and LIDAR (Laser Imaging Detection and Advanced technologies featured in safety, uptime and productivity. We optimize these In order to incorporate the most innovative Ranging), in addition to incorporating decision-making the heavy-duty truck used in the products and services to the needs of our customers in technologies, we anticipate new business relationships software algorithms and vehicle control mechanisms autonomous driving demonstration the form of transport solutions. Our success in this area will form. Clarifying our vision and mission is essential for steering systems, brakes, and engines. Equipped with Level 4 autonomous 3D Laser Imaging Detection and driving technology (currently permissible Ranging (LIDAR) is backed up by the loyalty of our customers, and our to building long-lasting partnerships with such new To develop electric vehicles tailored to customer in con ned areas), the truck can drive This technology helps ensure safe reputation for excellence in innovation and reliability. stakeholders. In August 2019, our L4 autonomous needs, we are working on optimal solutions ranging autonomously on precisely designated self-driving by detecting the presence of In short, our vision is to be a leader in truck driving trial in Hokkaido showed what can be from battery electric vehicle (BEV) systems to serial routes while detecting oncoming objects. oncoming objects.

7 8 Our 2030 Vision Highlights

Autonomous heavy-duty truck demonstration

innovation and thereby contribute to a more ef cient hybrid systems. Connectivity and digitalization also Japan’s rst Level 4 autonomous and sustainable transport system to meet tomorrow’s support smart logistics, including autonomous driving trial by heavy-duty truck on challenges. driving and electromobility. As a pioneer in this eld, public roads In April 2018, we announced our innovation UD Trucks uses telematics to connect more than From August 5 to 30, 2019, UD Trucks jointly conducted a roadmap—‘Fujin & Raijin. Vision 2030.’ 60,000 trucks. Level 4 autonomous driving trial with a heavy-duty truck * The Japanese government uses ‘Society 5.0’ to indicate together with Nippon Express Co., Ltd., a major logistics initiatives to enhance the quality of life and boost productivity Employees at the heart of our vision service provider, and Hokuren Agricultural Cooperative. through innovation in what may be called the fourth Bene tting our customers and society is central to our Government of cials, agriculture industry representatives and industrial revolution, characterized by arti cial intelligence, Fujin & Raijin innovation roadmap. Our employees are news media were on hand to observe a demonstration on robotics and IoT, among other disruptive technologies. August 29 at the Hokuren Sugar Re ning Mill in Nakashari, UD Trucks joins a truck platooning project led by two government at the heart of executing our vision of the future. My Hokkaido. The autonomous truck operated on a typical ministries, MLIT and METI. Milestones for tomorrow job is to support our people on this journey. delivery route, driving from the produce acceptance area to ‘Fujin & Raijin. Vision 2030.’ is our innovation At the Tokyo Motor Show 2019, under the theme the nal uploading area, with a portion of the route on a roadmap for the commercialization of autonomous of “Innovation for Smart Logistics,” we are public road. This was Japan’s rst Level 4 autonomous driving trial by a heavy-duty truck on a public road. trucks and fully electric trucks by the year 2030. Fujin encompassing technologies for Today, Tomorrow, A step closer to the is the Japanese god of wind; Raijin the god of achieved through collaborative efforts with partners and the Future towards 2030. While focusing on widespread use of safe thunder. Fujin symbolizes the power of movement from both the private and public sectors. (More on what we can do today, we are always considering (automation) and Raijin the power of energy page 10) how we can meet customer needs and society automated vehicles (electromobility). expectations in the years to come. Automation and electromobility are key to making Japan’s logistics industry is now confronting a shortage of Leveraging the power of the Volvo Group By the same token, this means we can never be drivers and the need to reduce vehicle emissions. Platooning, logistics more sustainable. As illustrated on page 6, By combining the strengths of UD Trucks and the satis ed and must strive to exceed the expectations of a type of automated driving that allows vehicles to drive our innovation roadmap takes a step-by-step Volvo Group, we can deliver more value for our our customers and all stakeholders. We will continue closely together in groups, is one solution. The Ministry of approach together with customers to offer solutions customers. The Volvo Group’s CAST platform to expand and solidify our position as an innovator Land, Infrastructure, Transport and Tourism is helping for select automation and electromobility applications (Common Architecture & Shared Technology), for and pioneer for sustainable transportation solutions. coordinate automated driving initiatives, including platooning applications, while giving the highest priority to safety and from 2020, moving towards full-edged example, offers an extensive array of core security. In short, it is assisting various companies to verify commercialization by 2030: technologies for the development of vehicles across the feasibility of automated driving applications and sharing Solutions the world needs today The most pressing problem faced by Japan’s Most of us depend on logistics to enable the 1) Level 4 autonomous driving demonstrations using the Volvo Group. the results among all players in an effort to overcome Since our inception, UD Trucks has been committed logistics industry today is a shortage of skilled drivers, lifestyles that we take for granted. heavy-duty trucks; UD Trucks, in turn, has a solid understanding of technical hurdles. to providing trucks and services that the world needs coupled with the rapid growth in e-commerce Reshaping the logistics industry to be more 2) Customer trials of Level 4 autonomous driving with customer preferences in Japan and other Takahiro Hirasawa today. Numerous world rsts by UD Trucks have deliveries. Compounding the situation are ef cient, sustainable and people-centric through heavy-duty trucks; predominantly Asian markets. Our global R&D team, Director of Automated Driving Technology, Volvo Group CAST platform Road Transport Bureau, Ministry of Land, Infrastructure, supported the technological advancement of the ever-stricter environmental regulations and upward innovation is the primary mission for UD Trucks and 3) Commercialization of autonomous driving in numbering 850 (approximately 500 in Japan and 350 Transport and Tourism automotive industry. trending fuel prices. the Volvo Group as a whole. We have a responsibility con ned areas . overseas), develops UD branded products in line with Applying leading autonomous to do this, and to lead the way. This roadmap goes beyond re ning our existing market needs. Our efforts also bode well for ‘Society 5.0,’ a technologies in house. We cannot do this alone UD Trucks ultimately decides what products to Renault Trucks Mack Trucks driving technologies tomation Japanese government initiative, which positions and will seek new partnerships to provide make and which technologies to employ. Taking Au romob The specially adapted heavy-duty Quon employed Elect ility autonomous driving as a bene t for society—from solutions for tomorrow. advantage of CAST, UD Trucks works closely with ct network-based RTK-GPS (Real Time Kinematic Global Conne ivity Positioning System) and was driven at an average speed of reduced congestion and environmental impacts, to Making autonomous and electric trucks an integral engineers at Volvo Group headquarters, while working Chassis Volvo Trucks UD Trucks 20 kilometers per hour under varying road surface is improved safety and convenience.* part of our transportation infrastructure requires to develop our own technologies for speci c markets. ansm sion Tr s conditions. UD Trucks President Takamitsu Sakamaki said, broad collaboration with relevant stakeholders. We ectronic With the introduction of the heavy-duty Quon in We combine the Volvo Group’s strengths with our El s “Level 4 autonomous trucks can now be used in con ned in ng es 2017, UD Trucks has focused on supporting smart must work with the transport companies who actually own technology in many areas. For automation, this E areas, helping address Japan’s current shortage of truck logistics—products and services that enhance fuel use our products in their operations and coordinate includes object recognition using onboard cameras, drivers. We will continue collecting data through trials like economy, environmental performance, drivability, with regulatory agencies, not to mention suppliers. radar and LIDAR (Laser Imaging Detection and these to meet the needs of customers and a wide array of stakeholders to enable the adoption of autonomous trucks safety, uptime and productivity. We optimize these In order to incorporate the most innovative Ranging), in addition to incorporating decision-making Buses as soon as possible.” products and services to the needs of our customers in technologies, we anticipate new business relationships software algorithms and vehicle control mechanisms the form of transport solutions. Our success in this area will form. Clarifying our vision and mission is essential for steering systems, brakes, and engines. is backed up by the loyalty of our customers, and our to building long-lasting partnerships with such new To develop electric vehicles tailored to customer Construction reputation for excellence in innovation and reliability. stakeholders. In August 2019, our L4 autonomous needs, we are working on optimal solutions ranging Equipment

In short, our vision is to be a leader in truck driving trial in Hokkaido showed what can be from battery electric vehicle (BEV) systems to serial Volvo Penta A video of the driving trial has been made available.

9 10 Our 2030 Vision Highlights

Autonomous heavy-duty truck demonstration

9 10 UD Trucks and Sustainability

UD Trucks is working with stakeholders to resolve social challenges.

Society

Customers Automotive industry Logistics

Suppliers

R&D Environment Academia

Challenges facing Challenges facing Our mission society the logistics industry Dealers UD Trucks provides the - Cost and ef ciency Recycling and Procurement - Traf c safety and trucks and services the congestion - Tougher regulations reuse People world needs today. We - Environmental issues - Shortage of skilled help make logistics smarter Smart logistics - Demographic changes drivers through improvements in Employee through - E-commerce delivery - Changing transport demands uptime, fuel economy and development environmental value creation performance, drivability, Governance safety, and productivity. Employees Safety

Sales and Production NPOs and servicing NGOs

Media Local Local communities communities Governments

Volvo Group SDG initiatives Together with the Volvo Group, UD Trucks supports all 17 of the Sustainable Development Goals (SDGs) unveiled by the United Nations in 2015, with a particular focus on people, safety, communities, and the environment. We are constantly re ning our initiatives based on business strategies and the needs of individual markets.

11 12 UD Trucks and Sustainability

UD Trucks is working with stakeholders to resolve social challenges.

Society

Customers Automotive industry Logistics

Suppliers

R&D Environment Academia

Sales and Production NPOs and servicing NGOs

Media Local Local communities communities Governments

11 12 Sustainability Activities

Measures for promptly dealing with quality-related issues UD Trucks set up its Quality Action Group in 2017 to minimize the impact of any quality-related issues for customers. Spanning product development, manufacturing, and aftermarket services, the group is comprised of teams that handle trouble shooting, technical teams that support dealers and customers’ sites, and branch of ce teams that directly respond to problems in their respective areas. The teams coordinate their efforts to quickly identify root causes and implement solutions. Through To reaf rm the importance of quality to help customers maximize the uptime this arrangement, all teams promptly among employees, the division of their trucks. share quality-related information and designates November of every year as UD Trucks also holds a worldwide quickly respond to the issue, ultimately Quality Month, during which all competition called UD Trucks Gemba leading to greater customer satisfaction. departments recon rm their respective Challenge with the goal of enhancing procedures, verify the progress of past the capabilities of employees involved in Product development actions to limit defects, and work to aftermarket services. Held bi-annually for quality standards make technical improvements. periods of about six months, the 1-1 UD Trucks carries out product competition tests the practical development projects in collaboration Improving the skills of knowledge and skills needed for solving Customers with various organizations in the Volvo aftermarket service staff problems that can arise at service centers. Group. The Company’s Product To ensure that customers can safely and By working through such tasks, teams of Development Division has established its reliably use its vehicles, UD Trucks works participants acquire new knowledge and own quality assessment standards that to raise the quality of its aftermarket skills. In 2018, about 1,300 participants incorporate processes shared throughout services through proactive measures for from 347 teams—a record high—from the Volvo Group. In accordance with improving the skills of employees various countries competed in the event, these standards, the division speci es involved in maintenance and repairs. of which 12 teams faced off in the nals Improving quality checkpoints at each stage of product For example, UD Trucks has been at the Company’s head of ce. development and con rms whether holding training workshops called targeted levels of quality are achieved Uptime Conferences at its head of ce Disclosure of information across a broad range of indicators, since 2013 to provide technical support concerning vehicle defects including a truck’s performance, and quality-related information about In the event of a vehicle defect that functions, durability and reliability. This new products for its dealer network. In could potentially affect customer safety process not only ensures higher quality 2018, about 350 mechanics and service or the environment, UD Trucks promptly Our approach ISO 9001 certi cation acquired but also shortens the total time required parts engineers joined workshops discloses all relevant information in UD Trucks strives to maintain and UD Trucks complies with the ISO 9001 international for product development. covering multiple topics, including accordance with guidelines issued by enhance quality across the entire value standard for quality management systems. The engines, truck models, and electronic Japan’s Ministry of Land, Infrastructure, chain, from product development and Company’s Manufacturing Division acquired ISO 9001 Quality assurance in control systems. They also discussed how Transport and Tourism. manufacturing through to sales and certi cation in scal 2002, followed by the Product manufacturing aftermarket services. At the same time, Development Division in scal 2016. UD Trucks works to Based on UD Truck’s own quality the Company adheres to the Volvo continuously raise quality by applying a plan-do-check-act management procedures, the Number of vehicle defects by manufacturer reported in Japan Group Quality Policy, which is based on (PDCA) cycle. Manufacturing Division conducts daily 2016 2017 2018 the principles of “customer focus,” inspections of procured parts and Volvo “commitment and participation by manufactured items to check for quality UD Trucks UD Trucks Volvo UD Trucks Volvo Trucks Trucks Trucks everyone” and “process approach and defects throughout the production Defects resulting continuous improvement.” Plan process and ensure targeted levels of 4 3 6 1 9 1 in recall quality. Re ned through continuous Defects requiring improvement over several years, these 0 2 0 1 1 0 improvement Act Do quality management procedures have Defects requiring been adopted by all factories in the 4 6 5 3 7 3 Volvo Group. servicing Check

13 14 Sustainability Activities

Equipping trucks with Testing driving performance Providing safe-driving advanced safety technology in cold regions seminars to customers In an effort to improve road traf c safety, To ensure that its trucks can operate UD Trucks invites customers to UD Trucks has been developing advanced dependably and safely in severe cold, UD participate in safe-driving seminars. The safe-driving technology and tting its Trucks conducts road tests every year in seminars cover a broad range of topics, trucks with such systems. For instance, the city of Kitami, Hokkaido, where it is the dangers of driving under the Quon model heavy-duty trucks come not uncommon for temperatures to drop inuence, blind spots, defensive driving, with Traf c Eye Brake, a system for to minus 20 degrees Celsius. In 2018, and reducing human error. The programs automatically braking before a collision, about 300 engineers and technicians combine lectures with hands-on training and Driver Alert Support, which detects conducted tests on six trucks during the so that drivers can quickly acquire steering irregularities. In addition to these extremely cold months of January and practical skills. Moreover, videos of actual advanced systems, UD Trucks considers February. On a snow-covered course accidents taken with drive recorders are safety in the basic performance of its totaling about 1,000 meters, the trucks used to give participants a real sense of trucks. For example, its trucks are were tested under various road how accidents can happen. equipped with disc brakes designed for conditions, including icy, slushy, and In 2018, 4,315 people participated in outstanding heat dissipation and potholed surfaces, for their powertrain 145 sessions, compared with 3,668 people resistance to brake fade. All of these and braking performance, as well as in 137 sessions in the previous year. systems not only help the driver operate drivability, ice buildup, engine startup, the truck more safely but also make the and ability to stay in a traf c lane road safer for other vehicles. without sliding out. In addition, the trucks were tested on city streets and mountain passes culminating in as many 1-2 as 300 kilometers per day. Customers

Advanced safe-driving systems installed in Quon model trucks Improving safety Trafﬁc Eye Brake Driver Alert Support Equipped with cameras and millimeter-wave radar technology, The Driver Alert Support system is the Traf c Eye Brake system warns the driver of a possible designed to estimate the driver’s level collision with the vehicle ahead. If the distance becomes of concentration by measuring steering dangerously close, the system automatically applies the brakes irregularities with a camera that detects while alerting the driver. UD Trucks adopted the system well in the position of the truck relative to advance of the November 2019 deadline set by the Japanese traf c lanes and other vehicles. If the government for equipping heavy-duty trucks with advanced driver’s concentration is deemed to fall Our approach Safe-driving seminar participants since 2014 emergency brake systems. below a certain threshold, the system UD Trucks carries out various initiatives Seminar participants Cumulative total sounds an alarm and two stages of for improving the safety of its trucks in (Participants) (Participants) messages (one to stay focused and the accordance with the Volvo Group Safety 5,000 25,000 next to take a rest) shown on a Policy, which aims for “zero accidents with multi-display. Volvo Group products.” When developing 4,315 products and services, UD Trucks 4,000 3,901 20,000 researches how its trucks are actually 3,668 Lane Departure Warning System UD Stability Control 18,463 used by customers and systematically 3,415 3,164 Utilizing cameras that monitor both The UD Stability Control system uses examines potential safety issues. Through 3,000 15,000 sides of the traf c lane, the Lane sensors to detect road conditions under this approach, the Company has been 14,148 Departure Warning System lights up which the truck could become equipping its trucks with a wide range of and buzzes to alert the driver if the unstable, such as slippery road surfaces safety systems and features designed truck appears to deviate from the on curves. When such conditions are 2,000 10,480 10,000 speci cally for drivers and the conditions traf c lane when driven over 60 detected, the system slows down the they operate in. kilometers per hour. engine and appropriately applies the 7,065 brakes on each tire to maintain stability. 1,000 5,000

3,164 0 0 2014 2015 2016 2017 2018

15 16 Sustainability Activities

3,164 0 0 2014 2015 2016 2017 2018

15 16 Sustainability Activities

Opportunities for female truck drivers In Japan today, while trucks deliver over 90% of all cargo (on a tonnage basis), a shortage of truck drivers is a serious problem facing the country. Only 2.4% of truck drivers are women in Japan, so efforts are being made to attract more women to the industry by improving working conditions. The Ministry of Land, Infrastructure, Transport and Tourism even launched a project in 2014 to provide support for women who aspire to become truck drivers. Instruction on how to drive Motivating truck drivers Playing a part in these efforts, UD more economically worldwide to develop Trucks invited 23 female truck drivers to Since 2007, UD Trucks has been holding their skills the UD Experience Center at its head eco-driving seminars aimed at equipping Every year, UD Trucks holds a global of ce in January 2018 to give them an truck drivers with practical skills and driving skills competition called the UD opportunity to test drive the Quon knowledge about how to improve fuel Extra Mile Challenge for drivers of its heavy-duty truck and participate in a ef ciency while driving. During the trucks, with the goal of motivating the discussion about improving working seminars, truck drivers learn and practice drivers to develop their capabilities and conditions and drivability. This was the special fuel-saving techniques for help operators make maximum use of its 1-3 second time the event was held. maneuvering and decelerating. The products and services. In 2018, winners During the test drive, the women seminars also make use of the UD of regional quali ers competed in the Customers evaluated the user friendliness of the Information Service, a wireless nal round of the competition in October Quon, which is ergonomically designed to communications system for collecting at the Company’s head of ce in Japan. A make driving easier for anyone. While all and analyzing data on a truck’s location driver representing Singapore who won of the women were truck drivers, several and movements, enabling evaluations of the Quon category remarked that after did not hold a heavy-duty license. vehicle speed, gear changing, and other diligently preparing for the event over Supporting However, many were so impressed with driving-related factors. Participants have the past year, the competition proved to the drivability of the Quon that they found this to be very insightful and be a valuable experience as he learned a expressed a desire to acquire a heavy-duty helpful for objectively understanding great deal about conserving fuel, proper license. Based on this feedback, UD their driving habits and making cargo storage, and many other aspects our customers Trucks reaf rmed its conviction that improvements accordingly. of truck driving. providing fuel-ef cient trucks that are In 2018, a total of 1,018 truck drivers easy to drive, even by beginners, will help participated in seminars held at 81 Prompt and useful attract new people to the industry and locations nationwide. Their fuel ef ciency customer service alleviate the shortage of drivers. improved by 24.9% on average after UD Trucks has established a customer Our approach Assisting women in the trucking industry taking the seminars according to data service call center made available with a Aiming to be the best choice for UD Trucks periodically organizes seminars and test driving events for female truck drivers analysis, demonstrating how this toll-free telephone number for customers customers, UD Trucks actively creates with the intention of helping alleviate the shortage of drivers in Japan’s trucking industry. In initiative is helping customers improve to ask questions, provide feedback and opportunities for promoting the bene ts 2018, the program included a presentation by a female engineer, a factory tour, test drives mileage and reduce CO2 emissions. make requests. To help the center’s and performance of its products to of Quon heavy-duty trucks, and a question and answer session. operators effectively handle calls, the The presentation was given by a UD Trucks employee in charge of product customers. Moreover, UD Trucks is Company has prepared a guidebook development. She emphasized the importance of ergonomically designed truck cabs for involved in helping its customers operate explaining responses to all foreseeable making truck driving work more comfortable and user-friendly, which is often requested by Message from a participant in the test-driving event for women inquiries. The center’s procedures and their businesses pro tably and overcome female truck drivers. She showed how handrails, in particular, were designed to improve “I want to drive a heavy-duty truck.” operations are also regularly reviewed to challenges, such as securing enough safety and make it easier to get in and out of the cab. truck drivers, increasing utilized truckload ensure that it continues to provide Not too long ago, driving was rather stressful because I capacity, and complying with prompt and helpful customer service. In couldn’t accelerate and decelerate as I was used to after our environmental regulations. 2018, the center handled a total of 3,791 two-ton delivery trucks were replaced with models that have calls compared with 4,691 in 2017. automatic rather than manual transmissions. Now, however, I want to drive a heavy-duty automatic truck since test-driving the Quon, which I nd very easy to drive. I am currently preparing to get a heavy-duty truck license. Yoko Ichiyanagi Nippon Express Co., Ltd.

17 18 Sustainability Activities

Ensuring responsible Balancing people, planet, Working in partnership with procurement and proﬁt independent dealers When procuring raw materials and The Volvo Group aims to maintain a In addition to its own network of equipment along with services and goods good balance between people, the dealers, UD Trucks supplies products and that are essential for daily operations, UD planet, and prots throughout its entire services to customers through six Trucks purchases in accordance with supply chain. Toward that end, the companies that operate a total of 32 Volvo Group policies from suppliers Group has been requesting all of its independent dealerships. While around the world. The Company’s suppliers to complete a sustainability respecting the corporate traditions and management understands that issues of self-assessment questionnaire and adopt local business practices of each of these public interest, locally based production, best practices. In 2018, the Group took dealerships, UD Trucks works closely with compliance with tariff agreements, viable the nal steps toward issuing a code of them towards the common goal of means of transportation and prohibition conduct for suppliers to specify and improving customer satisfaction, and of con ict minerals are vital for explain its basic expectations for them invites them to the same training maintaining sustainable supply chains, with respect to human rights, labor programs and events as its own dealers and requests its suppliers to work conditions, health and safety, responsible to help their employees acquire more towards the sustainability of their sourcing of raw materials, environmental skills and expertise. respective communities. performance, and business ethics. Meanwhile, the Volvo Group has Helping aftermarket service Human Rights Due been examining the impact of raw personnel improve their skills Diligence Program materials used in its products in regards Every year, UD Trucks holds a training The Volvo Group initiated its Human to the environment, society, and event called the Uptime Conference and Rights Due Diligence Program to identify, governance. Drawing from the results of an international skills competition called 2 analyze and prioritize risks related to the a report issued by Drive Sustainability and the Gemba Challenge for the purpose of sustainability of its supply chains, and the Responsible Minerals Initiative (RMI), enhancing the expertise of its mechanics, Business partners take appropriate countermeasures. A key the Group implemented a con ict service parts engineers and other component of the program are minerals program covering tin, tungsten, aftermarket service personnel. In 2018, sustainability audits of suppliers, through tantalum, gold, and cobalt. To conduct 40 employees from independent dealers which suppliers’ sites are visited and due diligence and proactively ensure joined the Uptime Conference, while 41 evaluated with respect to labor, human transparency in its procurement of these people from 11 teams competed in the Strengthening rights, and health and safety conditions. minerals, the Volvo Group became a Gemba Challenge. In 2018, the audits targeted 35 suppliers member of RMI, which is an international located mainly in China, India, and South NGO that studies responsible procurement Africa. In 2019, the Volvo Group plans to in the auto and electronics industries. our partnerships use the results of its sustainability audits to establish criteria for selecting suppliers at the procurement stage. Along with these activities, the Volvo Group has been working to raise Our approach Volvo Group procurement in 2018 awareness of sustainable procurement To help commercial vehicle operators run among its employees and the public, and their businesses successfully, it is essential billion Tier 1 suppliers began offering an e-learning course on for an automaker to develop and 270.3 51,000 this topic for all procurement department manufacture vehicles tailored to their Swedish kronor Around 6,000 automotive product components members in 2018. It also offers a training needs and to provide after-sales services of goods and services were purchased. suppliers accounted for about 91% of the purchases. program covering human rights, for the long term. From that standpoint, 2.5 billion parts for 40 factories environmental performance, and business UD Trucks recognizes that its suppliers worldwide were delivered. ethics to its suppliers through Drive and independent dealers are Sustainability, a Europe-based partnership indispensable business partners. of 10 global automakers formed for the Accordingly, it strives to forge strong 96% 91% purpose of promoting sustainability in the business partnerships while working to of automotive product suppliers of automotive-related procurement was purchased auto industry. In 2018, the Group trained raise customer satisfaction and adhering passed CSR self-assessment. from suppliers certied with ISO 14001 or staff from around 100 suppliers from to Volvo Group policies. equivalent standard. numerous countries, including China, Thailand, Spain, and Hungary. Percent of purchases by region

Europe North America Asia South America Africa and Oceania

62% 26% 7% 4% 1%

19 20 Sustainability Activities

Europe North America Asia South America Africa and Oceania

62% 26% 7% 4% 1%

19 20 Sustainability Activities

Promoting diversity and inclusion in the workplace At UD Trucks, differences among employees are embraced and respected based on an understanding that diversity is essential for the Company to succeed globally. Accordingly, while striving for sustainable growth, UD Trucks actively promotes diversity and a working environment that allows each individual to maximize his or her potential. The Company assesses how employees feel about diversity in periodic employee attitude surveys, which cover factors related to gender, nationality, and age. The surveys also incorporate questions on inclusion, such as the extent that employees Inclusiveness Community Japan. With the medium- and long-term strategies. In feel valued as important members of president serving as director, the scal 2018, the Company hired 177 new their teams. The results of these surveys organization is made up of male and graduates and 142 mid-career employees. are then used towards diversity and female employees from different Management also makes proactive inclusion management initiatives. departments, age groups and efforts to facilitate the success of female In 2018, these initiatives included nationalities. It held a variety of events in employees in the workplace, and had 3 workshops on preventing harassment, 2018, including harassment prevention appointed 52 women to various seminars on diversity and inclusion for workshops and training sessions for management positions as of December Employees managers, and employee and managers in charge of diversity and 31, 2018. In addition, all new job postings management meetings on gender inclusion activities. Members were also are advertised internally to provide equal equality. Moreover, during its annual involved in planning, publicizing and opportunities for employees, and, in Diversity & Inclusion Week in October, managing events and programs during principle, current employees are given the Company held an event on the Company’s annual Diversity & preference over external candidates. Empowering women’s empowerment featuring Inclusion Week. presentations by Toko Shirakawa, a Helping employees grow well-known female journalist in Japan, Support for improving and develop and Tetsuya Ando, a representative the skills of female employees UD Trucks places importance on our people from NPO Fathering Japan. A volunteer group called the Women’s developing and re ning the expertise and Inclusive Network (WIN) has been set up capabilities of its employees to equip Employee-led efforts to in the Company for the purpose of them with the skills they need not only promote diversity and inclusion helping female employees develop their for their current jobs but also for the At UD Trucks, various efforts to promote skills and abilities. The group planned future. Toward that end, the Company Our approach Employee data in 2018 diversity and inclusion are led by and carried out various activities in 2018, set up a committee in 2017 to put forward In order to develop people that can Number of employees by gender employees throughout the Company in including roundtable discussions about speci c measures for developing human resources, which have included the thrive anywhere in the world, UD Trucks Male Percentage of total 319 52 addition to campaigns initiated by women’s issues together with adoption of a new training management provides effective and practical training Female Percentage of total newly hired female human resources. This grass roots management, workshops on emotional programs, and assists employees with approach has been fostering a corporate and physical health, and communication system and upgrading training facilities. (Employees) (%) employees managers culture that values diversity and inclusion. skills training. A “learning day” was also held at the head career development through a fair and 8,000 100 transparent evaluation system. These 92.7 92.6 Comprised of of ce in 2018 to make employees more 86.8 177 new graduates programs and systems emphasize the and 142 mid-career Raising awareness of Putting employees ﬁrst aware of the need for skills development importance of respect for individuals, 6,082 employees diversity and inclusion UD Trucks recruits new employees in and to explain training programs made 5,789 5,823 self-actualization, diversity, teamwork, 800 422 433 UD Trucks has established a dedicated consideration of their skills and available by the Company. taking responsibility for one’s work, and internal organization called Diversity & aspirations as well as management’s open communication. The Company 4,000 50 25 nationalities uses employee attitude surveys and 5,282 5,367 5,390 Australia, Belgium, Bolivia, Brazil, Canada, other tools in an effort to create an open China, France, Germany, India, Indonesia, and comfortable workplace that allows Ireland, Japan, South Korea, Malaysia, Myanmar, Nepal, South Africa, Spain, Sri all of its members to make the most of 13.2 7.3 7.4 Lanka, Sweden, Thailand, the Philippines, their capabilities. Turkey, Ukraine, United States, and Vietnam 0 0 2016 2017 2018 As of December 31, 2018 Figures are for employees directly employed by UD Trucks

21 22 Sustainability Activities

21 22 Sustainability Activities 3 Employees Empowering our people

Rewarding performance score of the survey, management organizes Occupational health UD Trucks has established an employee various interactive events throughout the and safety Learning Day evaluation system designed to help its year, including town hall meetings and The Company’s management oversees a members develop their skills and gain Swedish-style group coffee breaks called wide range of initiatives designed to valuable feedback on their job ka, and regularly shares relevant news maintain safe workplaces and assist performance. Through the system, all and information on employee employees with healthier lifestyle choices. employees set goals each year and engagement efforts across the company. con rm their progress with supervisors Improving pedestrian safety semi-annually. The accomplishment of Promoting a healthy UD Trucks has clearly separated these individual goals provides a basis for work-life balance pedestrian routes and vehicle lanes on salaries and bonuses under the UD Trucks has put in place various the premises of its head of ce and Ageo Company’s remuneration system, which systems and policies designed to help Plant in order to create a safe Members of the Human Resources Division introducing a project also takes into account the performance employees maintain a healthy balance environment for employees and visitors. management training program of teams and the Company as a whole. between their working and personal lives. It has also constructed sidewalks separated from traf c by greenery on the Conducting employee Main systems and policies for street leading to the main gate of the attitude surveys supporting work-life balance premises to ensure public safety, Employee attitude surveys are conducted • Childcare leave system especially for local school children. on a regular basis in order to assess how • Nursing care leave system employees feel towards the Company • Telecommuting system Fitness check-up for employees and demonstrate how their ideas and • Flex-time system In June 2018, UD Trucks held a tness opinions are regarded as important. With • Anti-harassment policy check-up for employees at its head of ce Demonstrating how to use the training management system a view to continually increase the overall • Reduction and elimination of overtime tness center. Fitness indicators, including their weight, body mass index, muscle and fat mass, basal metabolism As one of its human resources development initiatives, UD Trucks held rate and visceral fat level are checked. a learning day for its employees in August 2018, with over 2,000 Based on the results, tness instructors employees participating. The event built on the Company’s past efforts Comments from an event organizer would give advice on diet and exercise. to create a supportive environment for employees to develop their skills. About 50 participants also joined Providing opportunities to enhance Those efforts include the adoption of a training management system relaxation sessions and yoga classes the capabilities of our employees in 2017 that allows employees to easily acquire information on training designed for alleviating lower back pain. programs. Learning day was intended to raise awareness of training This was our rst time to hold a learning day, so our opportunities among employees while fostering a culture of learning. Helping employees manage stress biggest challenge was to generate interest among Held in the head of ce auditorium, the event featured Stress assessments are routinely held in employees and encourage them to participate. Before motivational talks by managers followed by ve hands-on workshops the Company’s workplaces. Employees the event, we used posters and a website to clearly covering various elds that the Company specializes in. Outside the are encouraged to meet with physicians explain the bene ts of participating, and on the day auditorium, two booths were set up to consult with employees or counselors if their results indicate high of the event, we organized various games and directly, with one demonstrating how to use the training management stress levels, and their job responsibilities activities to create some excitement. Thanks to these system and the other displaying information about project may be reduced based on the advice of efforts, many employees participated, which greatly management, which is one of the training programs made available the physicians. contributed to our human resources development by the Company. objectives. The event demonstrated that employees The majority of participants gave the event high marks in a are very interested in learning, so we are motivated to follow-up questionnaire, with many expressing satisfaction that they provide them with useful tools and exciting training obtained the speci c information they had wanted. Others commented opportunities going forward. that they had gained an even greater appreciation for the importance of learning. UD Trucks plans to continue holding learning days in the future with the goal of increasing participation in training programs and raising awareness of skills development among employees. Chikako Kitayama Training and human resources development manager Volvo Group University

23 24 Sustainability Activities 3 Employees Empowering our people

23 24 Sustainability Activities

Road safety instruction for build a futsal court at an orphanage near elementary school students the Company’s head of ce in Japan. The Among prefectures in Japan, Saitama has employees were members of the teams a comparatively high number of fatal competing in the nal round of the UD road accidents involving medium- and Trucks Gemba Challenge aftermarket heavy-duty trucks*. As a truck skills competition. Children at the manufacturer based in Saitama, UD orphanage are highly motivated to play Trucks recognizes its responsibility to help soccer, especially since the facility has prevent road fatalities, and has been produced a number of professional conducting traf c safety programs for soccer players, so the completion of the elementary school children in the city of court was very special for them. On the Ageo since 2016. Through the program, same day, the employees also repaired elementary school students learn about old equipment and constructed a road safety and participate in activities wooden deck and benches. with actual heavy-duty trucks to demonstrate their blind spots and the Diverse nationalities Support for communities space required when turning corners meet school children damaged by torrential rains (speci cally the different arcs taken by In August 2018, UD Trucks held an event UD Trucks donated ve million yen to the the front and rear wheels). to provide Japanese elementary students Japanese Red Cross Society to support Over three years up to 2018, 1,372 with an opportunity to meet people from people in areas of Western Japan that students have participated in the various countries. The event was were severely damaged by ooding and program and 143 employees have organized in collaboration with local landslides caused by torrential rains in 4 served as instructors. The practical education boards in the area in which July 2018. The Company also helped activities involving the trucks in the Company’s headquarters is based. ensure that relief supplies could be Community engagement particular have been very valuable Fifty- ve students in grades ve and six delivered in the damaged areas by learning experiences for the children were given the chance to communicate providing tracking information for according to their teachers. in English with international employees telematics-equipped trucks to ITS Japan, * Based on data published by the Japan working at UD Trucks. The students a non-pro t organization. UD Trucks Trucking Association introduced themselves in English and provides tracking information for trucks Engaging with participated in a quiz aimed at guessing during disasters and emergencies Helping senior citizens use the home country of the employees. through its own information service to the internet While interacting in English was help determine the best delivery routes in In the city of Ageo, employees from the challenging for many of the students, the consideration of damaged roads. communities Company’s IT Division offer instruction on experience was enjoyable for everyone. how to use the internet for local residents aged 60 and older. The Futsal court for an orphanage employees initiated the program in 2016 In 2019, 67 group employees from with a desire to use their skills to give various countries worked together to Our approach Number of traf c safety program participants something back to the city. The program UD Trucks draws from the expertise and Elementary school students Employees is intended to improve the quality of life of older residents who are largely talents of its people and makes use of its Participants Cumulative total Participants Cumulative total facilities and resources to support unfamiliar with the internet by teaching communities. The Company strives to forge (Participants) (Participants) (Participants) (Participants) them how to access news and 600 589 2,000 60 200 information related to their interests. strong ties with its many stakeholders, 56 including the communities it operates in and its partners in the automotive industry, through initiatives aimed at 438 45 42 143 creating shared value. Starting from this 1,372 approach, UD Trucks is working to help 345 pave the way for a sustainable society. 300 1,000 30 100 87 783

438 45

0 0 0 0 2016 2017 2018 2016 2017 2018

25 26 Sustainability Activities

438 45

0 0 0 0 2016 2017 2018 2016 2017 2018

25 26 Sustainability Activities

ISO 14001 certiﬁcation environmental laws and regulations. Pursuing better fuel efﬁciency acquired group-wide In addition, the system is audited The fuel that trucks burn is not only a UD Trucks has acquired ISO 14001 every year by an accredited certi cation major expense for commercial vehicle certi cation for environmental body to verify its compliance with the operators but also a source of CO2 management. Beginning with its Ageo ISO 14001 international standard for emissions, which are a major contributing Plant in 1998, all of UD Trucks’ plants environmental management. Between factor to climate change. For that reason, and af liated companies acquired May and August 2018, such an audit UD Trucks is constantly improving the certi cation by 2017, allowing the entire was carried out to con rm that the fuel ef ciency of its trucks. Like other group to implement an ISO Company had incorporated 2015 truck manufacturers in Japan, UD Trucks 14001-compliant environmental revisions of the standard. has been subject to stricter fuel ef ciency management system. Leveraging the standards for heavy-duty vehicles since bene ts of this group-wide system, UD Reducing environmental impact 2015, with speci c targets set for each Trucks is currently working to achieve the over the product life-cycle weight class. Over 98% of all trucks sold objectives and targets of its UD Trucks analyzes the environmental by the Company in 2018 complied with environmental action plan. impacts of its trucks at each stage of the these targets, reecting its efforts to product life-cycle, beginning from equip trucks with leading-edge Auditing of environmental product development and design fuel-saving technologies. UD Trucks has management system through to the disposal and recycling of also achieved its own targets for average UD Trucks conducts an annual internal parts and components. Based on the fuel consumption since 2012. audit of its environmental management results of its analyses, the Company In addition to pursuing technical system to ensure that it functions strives to reduce the impact of its innovations for improving fuel ef ciency, effectively. During the audits, a team of products and operations on the UD Trucks has been holding eco-driving 5 quali ed audit committee members environment by using resources seminars for truck drivers in every region verify whether the system is being ef ciently and producing more of Japan to offer practical advice and tips Environment implemented properly and complies with environmentally conscious trucks. on driving more ef ciently. company rules and relevant Reducing our Material ow Raw materials Resources and Resources and Energy Energy and truck parts energy energy

Electricity and Input Water, electricity, Replacement environmental footprint fuel for facilities tires, fuel, etc. oil, etc. and equipment

Our approach The Volvo Group Environmental Policy 1. Development 2. Procurement 3. Production 4. Product usage 5. Product disposal and design of materials Includes pressing, heat treating, and recycling The Volvo Group has been working to Environmental progress is a key element in our mission to drive prosperity We use: and auto parts machining, painting, assembly, minimize environmental impacts through transport solutions. and inspections •technologies that We ensure reduce emissions throughout its history, and established The following principles provide direction for the work: sustainable We reduce the use of resources and We provide We sort materials •systems for the Volvo Group Environmental Policy for • Continually reduce life-cycle environmental impacts as an enabler for increased sustainability improving mileage procurement and hazardous substances, and eco-driving seminars and parts for reuse that purpose. In 2018, the Volvo Group and customer success •fewer materials that deliver parts to operate factories ef ciently to and recycling, and impact the environment suppliers via conserve energy properly treat and began implementing the policy and • Demonstrate responsible care for the environment wherever we operate and build trust by •technologies to energy-ef cient dispose waste declared that environmental initiatives adhering to our Code of Conduct. reduce vehicle noise transport •recyclable materials are important for realizing the Group’s • Minimize resource use, emissions and waste and utilizing means within our sphere of inuence and components mission. Guided by this policy, UD Trucks to create change towards a circular economy and to further improve our competitiveness has been implementing environmental conservation initiatives in all of its Environmental management organization business activities with the aim of CO2 CO2 Waste matter Executive of cer in charge of PM CO2 NOx Noise Automotive minimizing its environmental impacts. company-wide environmental management Waste PM Ef uent and NOx shredded residue SOx matter Output NOx vibration Waste matter Dust (incl. disposed tires) Airbags Chief environmental manager of Chief environmental manager of Chief environmental manager of Odor Noise and vibration Chloro uorocarbons the Manufaturing Division the Product Development Division the Sales Division

Departmental Departmental Departmental environmental managers environmental managers environmental managers The main environmental impacts of trucks over the entire product life-cycle are due to emissions of CO2 and exhaust gases containing particulate matter (PM) and nitrogen oxide (NOx) at the product usage stage.

27 28 Sustainability Activities

Electricity and Input Water, electricity, Replacement environmental footprint fuel for facilities tires, fuel, etc. oil, etc. and equipment

27 28 Sustainability Activities 5 Environment Reducing our environmental footprint

Improving fuel ef ciency with Chemical substance Helping the Volvo Group industry-leading technologies management reduce CO2 emissions UD Trucks has continually improved the UD Trucks strictly manages the chemical In 2011, the Volvo Group became the rst fuel consumption of its heavy-duty trucks substances used in its products, automobile manufacturer to join Climate by equipping them with a wide range of speci cally those included in the Global Savers, a World Wildlife Fund (WWF) industry-leading technologies, including Automotive Declarable Substance List, in initiative that brings global corporations in-vehicle displays for advising drivers, accordance with industry standards and together in effort to reduce greenhouse optimally designed engine systems, and laws concerning the production, import, gas emissions. The Group then set the advanced functions for precisely controlling management, and recycling of chemical goal of reducing CO2 emissions from its driving speed. Indicating the effectiveness of substances. factories by an average of 12% by 2014 these technologies, compared with Japan’s compared with its result in 2008. The fuel ef ciency standards for heavy-duty Group exceeded its target early, cutting The Quon’s driveline is designed to improve vehicles set in 2015, the Company’s agship fuel ef ciency Managing chemical substances emissions by 20% in 2013. Riding that before and during manufacturing Quon heavy-duty truck beat targets by over momentum, the Volvo Group stepped up Workplace recycling areas are set up on each oor of the head of ce building 5% in over 90% of tests. At the product development and design its efforts and set a new target of stage, UD Trucks determines what reducing emissions by 8% over the 2013 chemical substances will be used at the result by 2020. established its own waste-management works to reduce and recycle waste Major technologies applied in heavy-duty trucks manufacturing stage, including chemicals To help achieve this goal, UD Trucks system and created waste sorting matter with the goal of minimizing the used by suppliers. It then registers relevant has established a number of committees management standards for all of its amount of waste it disposes in land lls. data with the International Material Data comprised of members of all relevant dealers in 2014. In accordance with the In 2018, the Company reduced the Vehicle • Fuel Coach system for advising drivers on fuel-ef cient driving System, a database jointly managed by divisions, including a committee charged standards, each dealer has installed volume of waste sent to land lls by • Foretrack function for predicting the road ahead based on scanned data automobile manufacturers worldwide. with saving energy, to set targets and disposal facilities and properly sorts 99.9% compared with the amount in • Aerodynamic designs including front bumper- tted air dams At the production stage, UD Trucks formulate action plans. In 2013, the waste materials during truck disassembly 1990, and achieved its target of limiting and newly developed wind deectors reports to the government each year on Company succeeded in reducing CO2 and disposal. In addition, the Company land lled waste to under 1% of total its usage of chemicals subject to Japan’s emissions by 61.3% compared with the delivers service parts in returnable waste generated. Engine • Ultra-high-pressure fuel injection systems Pollutant Release and Transfer Register, 1990 result, beating its target of 39% by packages to dealers to facilitate the reuse In order to improve its waste • Optimally shaped combustion chambers which is a system for restricting and a wide margin. Building on that track of materials. management system, UD Trucks • Optimally designed induction systems controlling the discharge of designated record, UD Trucks is currently working to UD Trucks looks for ways to make concluded a consulting agreement with a • Variable speed water pumps chemicals into the environment. The offset growth in emissions resulting from disassembly work easier and use company that specializes in waste Company also makes efforts to replace rising production volume to help the resources more ef ciently starting from disposal in April 2015. Through this Power train • ESCOT Roll system for minimizing the decline in speed hazardous chemicals with less harmful Volvo Group achieve its 2020 target. the product development stage. For partnership, UD Trucks has been using when coasting alternatives, and properly comply with example, bumpers are designed to be only highly reputable disposal rms, • Acceleration limiter for ensuring gradual speed increases revisions of relevant laws or regulations. Reducing waste matter simply disassembled into three administering and submitting all • Soft Cruise Control function for controlling acceleration at the product disposal stage components, headlights can also be necessary reports to government The nal disposal of a truck at a dealer’s easily dissembled into interchangeable agencies, and keeping records on the site accounts for the largest amount of lens and LED units, and fenders are made amount of waste disposed in an effort to waste matter during the product from recyclable materials. strictly comply with laws and regulations Average improvements in fuel ef ciency of UD-brand trucks life-cycle. For that reason, UD Trucks has At the production stage, UD Trucks concerning waste management.

Comparative improvement in fuel ef ciency* (Percentage points) 107 106 Environmental event held for community leaders 105 104 In November 2018, UD Trucks invited 11 of cials from a neighborhood association near its 103 head of ce in the city of Ageo to a meeting about the environment. At the meeting, 102 employees explained measures for reducing environmental impact at the Company’s Ageo plant and head of ce building, and presented plans for developing more environmentally 101 conscious products. The of cials expressed their appreciation for being given the 100 opportunity to learn about how UD Trucks considers the local environment in its business 99 activities, and their desire for it to actively contribute to the community and environmental 98 conservation in the future as a good corporate citizen. 97

0 2010 2011 2012 2013 2014 2015 2016 2017 2018

* The percentages were calculated using the harmonic average of the fuel ef ciency achieved by medium- and heavy-duty trucks sold each year, with the base year of 2015 set as 100%.

29 30 Sustainability Activities 5 Environment Reducing our environmental footprint

0 2010 2011 2012 2013 2014 2015 2016 2017 2018

* The percentages were calculated using the harmonic average of the fuel ef ciency achieved by medium- and heavy-duty trucks sold each year, with the base year of 2015 set as 100%.

29 30 Sustainability Activities 5 Environment Reducing our environmental footprint

Environmental performance data

History of ISO 14001 certi cation by plants and subsidiaries PCBs used at the Ageo Plant in 2018 Resources Total waste reused and disposed in 2018 Ageo Plant Weight* 1988 Equipment containing PCBs (kilograms) Reused iron and Kounosu Plant 2004 non-ferrous materials (Sold to Global Component Technologies Corporation in January 2015) Capacitors 2,804 Ageo Plant Hanyu Plant Ballasts 25,367 2004 (Sold to UniCarriers Corporation in March 2016) Gunma Parts Waste reused and recycled Distribution Transformers 800** Total waste generated DRD Co., Ltd. Center tons Recycled as fuel chips 2005 5,121 (Sold to Persol Tempstaff Co., Ltd. in June 2013) 5,135 tons Total 28,971 (99.7% of total) Techsus Co., Ltd. 2005 (Acquired by UD Trucks Corporation in July 2013) * The gures include estimated amounts. ** The weight includes the transformer unit. N-Tech Co., Ltd. Reused as raw 2006 materials for cement (Sold to Kihara Manufacturing Co., Ltd. in March 2015)

Japan Vehicle Co., Ltd. 2008 Waste (Acquired by UD Trucks Corporation in July 2011) disposed in land lls 14 tons (0.3% of total) Volvo Logistics Corporation Japan Co., Ltd. Recycled as refuse 2009 (Acquired by UD Trucks Corporation in April 2014) paper & plastic fuel

Amount of total waste disposed and percent Water consumption reused or recycled Energy and CO2 emissions Waste disposed in land lls Target* Percent of total waste Total water consumed Water consumed per reused or recycled vehicle produced CO2 emissions (Tons of waste) (Percent) (Thousand cubic meters of water) (Cubic meters of water) 20,000 100 2,500 100 Total emissions Targeted emissions Emissions per vehicle 99.8 99.7 99.8 99.7 99.7 (Thousand tons of CO2 emissions) (Tons of CO2 emissions) 89.4 150 10 2,000 80 2,000 80

68.5 2,070 120 8 1,000 60 1,500 60

140 137 1,643 90 6 100 40 1,000 40

19,268 2,273 60 4 50 20 500 678 20 508 382 317 340 30 2 0 22 21 13 16 14 0 0 0 1990 1995 2014 2015 2016 2017 2018 1990 1995 2014 2015 2016 2017 2018 0 53 35 33 29 24 0 * UD Trucks began setting ambitious targets in 2004 following initiatives 1990 1995 2014 2015 2016 2017 2018 for recycling and reducing waste implemented by the Japan Automobile Manufacturers Association. CO2 emissions by energy source Heat usage from large-scale natural gas cogeneration systems Electricity Heavy oil Coke Diesel oil City gas Liqui ed petroleum gas Other Regulated chemical substances handled by the Ageo Plant in FY2018 Kilograms per year

(Thousand tons of CO2 emissions) Regulation Volume Emissions Mileage Disposed or Consumption 0.5% 140 Chemical substance Recycled number handled Atmosphere Water Soil Waste processed by products 5.3% 5.9% 0.3% Heat lost Heat recovered 53 Ethylbenzene 16,633 6,475 0 0 0 1,876 8,196 86 through exhaust and used 12.4% 0.03% 80 Xylene 30,982 9,369 0 0 0 2,043 19,124 446 46.0% 43.4% Total natural gas 56.6% 14.7% consumed in 2018 296 1,2,4-Trimethylbenzene 2,191 1,102 0 0 0 524 0 564 19.2% 17.5% 0.1% To generate 297 1,3,5-Trimethylbenzene 4,124 483 0 0 0 41 3,491 109 electricity To produce steam 300 Toluene 6,153 4,062 0 0 0 1,244 85 763 24 40.5% 43.7% 16.1% 34.4% Amounts shown in the graphs for energy and CO2 emissions as well as resource-related data are combined results from the Ageo Plant and Gunma Parts Distribution Center. Amounts shown in the graphs for water consumption and total waste disposed and percent reused or recycled, however, include results 1990 2018 from other plants up to scal 2017.

31 32 Sustainability Activities 5 Environment Reducing our environmental footprint

Environmental performance data

68.5 2,070 120 8 1,000 60 1,500 60

140 137 1,643 90 6 100 40 1,000 40

31 32 CSR, Compliance and Corporate Governance

Our CSR framework CSR management system UD Trucks has created its own framework for ful lling its and promote safety while working together with stakeholders. At UD Trucks, social contribution activities are overseen by the Executive management meetings corporate social responsibility (CSR) and guiding related activities At the same time, UD Trucks works to ful ll its basic corporate manager in charge of CSR and environmental management. This in a focused and systematic manner. The purpose of this responsibilities across all of its business activities. Accordingly, it manager along with the managers in charge of corporate CSR senior management team comprising managers in charge of framework is summed up by the Company’s vision of providing carries out measures to ensure sound corporate governance, communications and brand management, respectively, comprise CSR and environmental management, corporate communications, practical solutions that promote sustainable logistics and help strengthen compliance with laws and regulations, maintain the Company’s CSR senior management team. In addition to and brand management communities thrive. Toward that end, UD Trucks is aiming to create management systems certi ed by the International Organization coordinating CSR activities across all divisions and compiling shared value with stakeholders and the communities it serves by for Standardization (ISO), and closely follow the Volvo Group information on those activities, the team formulates CSR-related CSR manager of the Domestic Sales and Aftermarket Division working with them to overcome challenges. The Company focuses Code of Conduct and other important group policies. strategies and plans as well as initiatives for raising awareness of CSR manager of the Overseas Sales and Aftermarket Division on community engagement as well as logistics and transport, the This framework was designed to comply with the Volvo the Company’s social contribution activities among employees industry most closely linked to its business, while drawing on its Group’s CSR policies and reect the Company’s business strategies and the public. To ensure these strategies and plans are CSR manager of the Product Development Division know-how, technical expertise, human resources and network of and brand characteristics. Under the framework, UD Trucks consistently implemented company-wide, CSR managers are facilities to make positive and lasting contributions. Within the encourages its employees to become actively involved in a wide appointed in each division, and they jointly hold regular meetings CSR manager of the Manufacturing Division industry, it makes concerted efforts to protect the environment range of CSR initiatives. to share inter-divisional information and plan speci c activities. They report on the progress of these activities to executive CSR manager of the Corporate Governance Division management, and receive instructions, resolutions, and approvals UD Trucks shall strive to realize practical solutions that from executive managers. CSR manager of overseas operations Vision promote sustainable logistics and help communities thrive.

Ful ll basic corporate Approach Create shared value social responsibilities Systems for ensuring compliance UD Trucks carries out its business activities based on the Volvo in order to ensure that all members understand these principles of • Ensure sound corporate governance Group Code of Conduct, which is organized under the ve key the code. It also provides training courses speci cally for new • Maintain compliance with principles of respecting one another, earning business fairly and employees as well as personnel in charge of certain duties. laws and regulations Community lawfully, separating personal interests from business activities, Furthermore, UD Trucks has also set up an internal whistleblower Scope Logistics and transport engagement • Conduct thorough risk management • Manage a sustainable supply chain safeguarding company information and assets, and system and audit program for facilitating prompt and proper • Comply with ISO 14001 and communicating transparently and responsibly. UD Trucks regularly responses to any cases of wrongdoing or suspicious actions. ISO 9001 standards offers training and e-learning courses for employees and managers • Enforce the Volvo Group Code Protect Work with Respond to of Conduct Focus Promote safety the environment stakeholders community needs • Follow all Volvo Group policies

Risk management Active involvement of employees At UD Trucks, efforts to strengthen risk management are led by formulates crisis management and business continuity plans, and the Security Management Division. Tasked with a diverse range of makes preparations for resuming operations in the event of a responsibilities, the division oversees the safety of employees and disaster. UD Trucks has been maintaining safe and secure visitors at all workplaces, safeguards con dential information and operations thanks to the division’s ongoing efforts to identify risks intellectual property, handles emergency response activities, and takes proactive steps to prevent them from materializing. The Volvo Group Code of Conduct Aiming to ensure that its business activities are carried out ethically and in compliance with the laws of every country it operates in, Information security the Volvo Group has speci ed basic principles and conduct for all employees around the world to follow in the Volvo Group Code of Based on the Volvo Group’s information security policies, UD Trucks measures for preventing data breaches resulting from Conduct. UD Trucks has been taking a variety of measures to has taken measures for maintaining the security of its information cyber-attacks, and regularly provides training sessions on maintain an in-depth awareness of the code among all of its and data, and has been putting an information security improving information security to its dealers nationwide. In members, such as producing and distributing promotional posters governance system in place. To guard against an information addition, UD Trucks strictly manages and protects all personal and a handbook that explains exemplary cases related to the code. system breakdown caused by a disaster, the Company stores and information it possesses in accordance with the Volvo Group’s Articles about the code and videos of panel discussions on related manages electronic information at an earthquake-resistant data privacy policies. topics among managers and representatives from various center in addition to its head of ce. It has also stepped up Company departments are also featured on UD Truck’s intranet. A poster promoting the Volvo The Volvo Group Code of Group Code of Conduct Conduct booklet

33 34 CSR, Compliance and Corporate Governance

33 34 About UD Trucks Corporation About the Volvo Group

UD Trucks is a leading Japanese commercial vehicle solutions provider, active in more than 60 countries on all continents. UD Trucks is a member of the Volvo Group, a global enterprise headquartered in Gothenburg, Sweden. The Volvo Group Since its inception in 1935, the company has been an innovation leader with a clear vision to provide the trucks and manufactures trucks, buses, construction equipment, and marine and industrial engines, while also providing nancial services the world needs today. The company is committed to go the extra mile for smart logistics with services. Employing about 100,000 people worldwide, the Group manufactures its products at factories in 18 countries the most dependable solutions for all customers. and sells them in more than 190 markets.

Company overview (As of October 1, 2018, unless otherwise stated) Volvo products in everyday life

Company name UD Trucks Corporation

Date of foundation December 1, 1935

Head of ce address 1-1, Ageo-shi, Saitama 362-8523, Japan

Capital 77.5 billion yen On the road Off road In the city At sea The Volvo Group’s products help The Volvo Group’s engines, The Volvo Group’s products are a The Volvo Group’s products and Number of employees 6,188 employees including contract and temporary employees (as of December 31, 2018) ensure that people have food on machines and vehicles can be part of daily life. They take people services are present at sea, the table and roads to drive on. found at mining and construction to work, distribute goods, and whether one is at work on a ship, Main business Japanese business Its vehicles enable people to sites and in the middle of forests. collect rubbish. The Group is on holiday on a pleasure boat, or Development, manufacture, export, and sales of heavy-duty trucks; sales of medium- and light-duty travel to their destinations and developing tomorrow’s public in need of urgent help from sea trucks; manufacture and sales of vehicle components; maintenance and sales of service parts for deliver goods to keep production transport solutions with an rescue services. trucks and buses; import and sales of Volvo brand products. plants running. increased focus on electri cation.

Businesses outside of Japan Development, manufacture, and sales of heavy-, medium-, and light-duty trucks for growth Volvo’s basic approach to CSR markets; manufacture and sales of vehicle components; maintenance and sales of service parts for • Driving prosperity “Driving prosperity through transport solutions” is the Volvo Group’s through transport solutions trucks and buses. mission. To ful ll it, the Group has formulated a vision backed by • Be the most desired and Domestic group speci c aspirations for all of its members. To foster a corporate successful transport VFS Japan Co., Ltd.; New-Mech Co., Ltd. solution provider companies culture underpinning this future direction, Volvo Group is Mission in the world promoting values for every employee to share and integrate in all • Have leading customer Main locations UD Trucks Singapore Of ce; UD Trucks Bangkok Plant; parts distribution centers in Singapore, operations, with a view to grow its business while helping make Vision satisfaction for outside of Japan all brands in their the United Arab Emirates and South Africa the world more sustainable. respective segments In addition, the Volvo Group has created a Code of Conduct Aspirations • Be the most admired employer in our industry that speci es basic principles and conduct for all employees to • Have industry leading Ofﬁcers Total vehicles shipped by follow, and clearly explains business ethics and compliance-related Values pro tability region in 2018 issues relevant to all business activities. • Customer success Volvo Group Code of Conduct • Trust • Passion • Change Asia 16,221 • Performance Africa and Oceania 4,034 South America 319 Results of key performance indicators in 2018 Total 20,574 Net sales Operating income Share of net sales by market Joachim Rosenberg Takamitsu Sakamaki Jan Gurander Masahiro Otsuki (SEK bn) (SEK bn) South America Europe Executive chairman and President and Director Auditor 391 34.5 representative director representative director 5% 41% 333 29.7 313 302 Africa and Oceania 283 23.3 Products sold by UD Trucks 20.8 6% Asia North America 20% 28%

5.8

UD Trucks brand trucks Volvo trucks Volvo Penta engines Volvo construction equipment Share of net sales by revenue type Quon heavy-duty truck, Condor Imported Volvo brand heavy-duty Imported Volvo Penta brand Imported Volvo brand construction 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 medium-duty truck, and Kazet trucks, particularly the Volvo FH industrial and marine engines for equipment, including wheel Financial services light-duty truck for the Japanese lineup of 4×2 and 6×4 tractors for the domestic market, including loaders and articulated dump and other mature markets, and the domestic market forklift and pleasure craft engines, trucks for the domestic market Total number of employees Total CO2 emissions 3% Quester heavy-duty truck, Croner and installation and technical tons/SEK M medium-duty truck, and Kuzer support for original equipment 105,175 1.1 Services Vehicles light-duty truck for growth markets manufacturers Share of women Energy consumption 20% 77% 19% 5.8 MWh/SEK M SEK: Swedish krona. The US dollar to SEK exchange rate averaged approximately 0.10 dollar per SEK in November 2019.

35 36 About UD Trucks Corporation About the Volvo Group

Company overview (As of October 1, 2018, unless otherwise stated) Volvo products in everyday life

Company name UD Trucks Corporation

Date of foundation December 1, 1935

Head of ce address 1-1, Ageo-shi, Saitama 362-8523, Japan

5.8

35 36 1-1, Ageo-shi, Saitama 362-8523, Japan udtrucks.com