In a ground breaking announcement that has taken the truck industry by surprise today, Hino and Volkswagen Truck and Bus have announced an agreement to work together on technologies including conventional drivelines, hybrids, electric drivetrains, autonomous driving and connectivity.

Under the deal, the companies will maintain independence but executive teams will work together to map out cooperation on development of innovative technology. The two companies have set up a Joint Alliance Board based on the agreement to discuss the direction of the long-term and eye-level partnership.

According to Hino, the Alliance Board will pursue a “pragmatic approach with a lean organization and balanced rights for both companies that remain independent.”

The board comprises chief executive officers from both companies as well as additional senior management representatives.

According to Hino’s announcement, the evaluation of technological cooperation will focus on conventional powertrains, hybrid and electric powertrains, as well as connectivity and autonomous driving systems.

“Both partners aim to enhance their respective market positions in the global transportation business and will jointly develop innovative technologies to offer customers the highest value,“ the Hino statement said

The arrival of the digital age and robotics in the automotive industry is pressuring vehicle makers around the world to deliver vehicles that connect to the internet and perhaps avoid accidents automatically.

Collaborations such as the Hino/VW alliance can save cost and boost competitiveness. Automakers are also trying to respond to a push to reduce global warming and pollution by developing cleaner powertrains.

The deal brings together two major players in trucks and buses, a sector that is really pushing ahead with this sort of new technology with many believing that the heavy vehicle sector will pioneer many of the latest innovations in the next few years.

Hino Motors president and CEO, Yoshio Shimo said the deal came together because the companies respected each other and shared goals.

“It will also be a strong tie-up at times of new challenges in the field of transportation due to the rapid growth of e-commerce,” he said.

People in Japan and other rapidly aging countries are looking for new kinds of transportation solutions, Shimo said.

Andreas Renschler, CEO of Volkswagen Truck and Bus, said the deal was strategic for his company because Hino was strong in Asia.

“It is an excellent fit in terms of regional footprints and products, but also concerning common ideas on how to shape the future of transportation together,” Renschler said.