Toyota’s truck operation, Hino and Daimler owned Fuso Truck and Bus, will merge operations with the companies explaining the move was “in order to better compete in the market for freight-hauling vehicles”.
The four companies said that they had signed a memorandum of understanding to bring Fuso and Hino together under a single company, which will jointly owned by Toyota and Daimler Truck.
The companies said that they plan to sign a binding agreement by March next year with the goal of integrating the business by the end of 2024.
The announcement came as a total shock to many, despite the fact that Hino has been mired in scandal for the past year, following the revelations that it had been falsifying emissions and fuel economy figures.
Parent Toyota made much of its horror in finding out about the scandal, and decried the culture and management of Hino in allowing the situation to happen, allegedly since around 2004. This was even though Hino has been controlled by Toyota since before that date, and Hino CEOs since then have all been from Toyota.
Toyota’s damage control left a lot to be desired and it is understood recently retired president Akio Toyota along with his replacement, Koti Sato have been trying to distance themselves from the scandal. It is believed that along with the need to amortise the immense cost of decarbonisation by increasing scale, the merge will allow the Japanese giant to place Hino further away, to prevent more ‘loss of face’.
Toyota currently owns just over 50 per cent of Hino and it is believed that deal will offer Daimler Truck the ability to tackle its targets of improving profitability and margins more aggressively. Fuso has apparently been a drag on Daimler profitability in recent times.
Daimler first took shares in Fuso in 2003 and now owns 89 per cent of the stock and the Fuso brand was first founded by the Mitsubishi group more than 90 years ago.
Fuso’s German boss, Karl Deepen said during the press conference that with som much history and the strength of Daimler behind the brand some may wonder why Daimler was now tying up with Hino?
“Simply put, the world is changing and our industry needs to change with it,” said Deepen.
“Japan’s economy and the societies of Asia, need state-of-the-art-transportation, and at the same time, Japan has committed to being carbon neutral by 2050,” he said.
“We take it as our task to be part of the solution to decarbonise transportation and today’s customers demand even more; connectivity, automation, electrification – a whole range of advanced services and technology to make logistics as safe, as efficient and as profitable as possible. All, while causing the least possible harm to the environment.
“Being frank, developing that takes enormous investment, resources and also expertise, to continue to offer our customers value, while also staying successful ourselves, we need partners and we need industrial scale, and who better to tie up with that Hino, a company as dedicated to the commercial vehicle industry as ourselves<” Deepen said.
“With this bold move, we will more-than-double our resources, that means increased access to knowledge, expertise and a wider network of suppliers and infrastructure, more people working together to develop technology faster,” he added.
This collaboration can only work if we join as equals, respecting each other, respecting each other’s strengths and working together to make the future brighter than either of us could find alone,” Deepen said.
“That is why I am so satisfied with the terms we have set forward today, one company with two strong distinct brands, supported by the expertise and resources of Toyota and Daimler Truck,” he said.
On a local front Daimler Truck Australia boss, Daniel Whitehead said he was excited by the news.
“This is exciting news for both Fuso and Hino both globally and in Australia. We look forward to sharing more details about this closer to the planned agreement conclusion at the end of next year,” Whitehead said.
WhiteCombining Hino and Fuso may also allow both companies to bring in fresh management expertise, as well as promising larger production scale and volumes, which should bring savings on purchasing costs as well as for the vast expense of R&D.
The companies in the joint statement said that Fuso and Hino will “merge on an equal footing and collaborate in the areas of commercial vehicle development, procurement, and production and they will build a globally competitive Japanese commercial vehicle manufacturer”.
While the announcement was made jointly Leinfelden in Germany and at the same time in Tokyo, neither company would be drawn on exact financial details of the merger, with many of those details still yet to be resolved.
However they did state that Daimler Truck and Toyota will equally invest in the (listed) holding company of the merged Fuso and Hino and that T hey will collaborate on the development of hydrogen and other ‘CASE’ technologies to support the competitiveness of the new company.
Hino and Mitsubishi Fuso “will work together to improve operational efficiencies, including in development and production, and hone the competitiveness of Japanese commercial vehicle manufacturers,” they said in the statement.
Details on the scope and nature of the collaboration including the name, location, shareholding ratio and corporate structure of the new holding company will be decided over the course of the next 18 months.
The companies say they envisage signing a definitive agreement by next March once an agreement has been reached they will move forward based on the approval of the relevant boards of directors, shareholders, and authorities.
Daimler Trucks global boss, Martin Daum said his company was very proud of its products, because trucks and buses keep the world moving.
“Soon they will even do so with zero emissions. So there is a great future ahead – and today’s announcement is a crucial step in making that future work economically and in leading sustainable transportation,” Daum said.
”The planned new company will be a major force in Southeast Asia and an important associate of the Daimler Truck family,” the Daimler boss added.
Toyota chief Koti Sato said the collaboration between the four companies is a partnership for creating the future of commercial vehicles in Japan and the future of mobility society.
”Our four companies will work together with a shared vision of achieving carbon neutrality by strengthening CASE technologies (Connected/Autonomous and Automated/Shared/Electric) and of changing the future of commercial vehicles and building the future together by solving social issues,” Sato said.
, Karl Deppen said the close collaboration will enable the joint operations to accelerate the decarbonisation of the transportation industry.
”This will create an even stronger Japanese commercial vehicle manufacturer.,” said Deppen.
”Under the two well-established brands of Fuso and Hino, we will continue to take a leading role in serving customer needs in Japan, Asia and beyond,” Deppen said
Hino Satoshi Ogiso, CEO of Hino: Hino CEO Satoshi Ogiso said that the merger will unite aspirations to ‘support mobility and contribute to society.
”It will also hand in hand, accelerate advanced technology development in order to overcome the increasingly fierce global competition. Through these efforts, we will strive to tackle societal challenges such as achieving carbon neutrality,” Ogiso said.