At a time when nothing should surprise us when it comes to corporate tie ups and MOUs, automotive giant, Toyota has announced a capital alliance with its truck subsidiary Hino and Isuzu, which it says will revive a ‘partnership to bolster their competitive edge in connected, commercial vehicles’.
The tie up follows a tumultuous time in the truck industry that has seen Volvo Group sell UD to Isuzu for around $2.3 billion, Volvo announce a joint venture with rival Daimler to develop hydrogen fuel cell trucks, Hino sign an MOU with VW’s Traton truck operation to cooperate on hydrogen and electric power trains, Isuzu announce it had signed an agreement with Cummins to use the engine maker’s large engines, and for it to use Isuzu’s small engines, badged as Cummins. If that wasn’t enough, Hino America last week also signed with Cummins, saying it would cease development on diesel in the USA, using Cummins power instead, enabling Hino to concentrate on electric and zero emission.
So the Toyota, Hino, Isuzu alliance should not surprise anyone. It is getting like a 70s swingers party with no one certain whose car keys will be plucked from the bowl when the party finishes.
Toyota says Hino will be a part of the pact, to jointly develop small commercial trucks of the future, including connected vehicles and fuel cell technologies.
Connected vehicles can share internet access and data with devices outside the vehicle, making them more efficient.
Under the deal, Toyota will acquire 39 million treasury shares in Isuzu, worth $AUD 519 million (42.8 billion yen), and take a 4.6 per cent stake in the Japanese truck maker.
In fact Toyota and Isuzu dissolved a previous, 12-year capital tie-up in 2018 that had focused on diesel engines.
The move comes as traditional automakers face growing competition from tech giants and other rivals developing electric and driverless vehicles.
Toyota president, Akio Toyoda said the push for electric vehicles and carbon neutrality gave the companies a reason to get together again.
“We had tried to jointly develop small diesel engines together… but we didn’t really identify specific projects much, and we decided to split and find our own ways,” he told a news conference.
“But then EV became a new common ground for us again, where common research and development could take place,” he added.
The new partnership with Hino made “perfect sense for our customers,” said Isuzu, president, Masanori Katayama, adding that the two companies account for 80 per cent of the commercial vehicles market in Japan.
Japan traditional keiretsu cross shareholding system allows companies to hold alliances like this, where they may be stopped in Western eeconomies by anti trust or anti competition laws.
“Certainly, this partnership of Isuzu and Hino will make sense in revolutionising logistics business overall,” said Katayama.
While Isuzu and Hino remain competitors, they could also work together in some of the areas that users are most interested in, the Toyota president said.
The three companies will also set up a new joint venture, Commercial Japan Partnership Technologies Corporation, with Toyota owning 80 pe cent and the others owning 10 per cent each.
The company, which will begin operation in April, will implement projects such as introducing fuel cell electric vehicle trucks.
Toyota shares fell 2.2 per cent, in line with the broader Tokyo stock market, but shares of Isuzu Motors Ltd ended up 5.4 per cent following the announcement. Hino Motors Ltd finished the day down just one per cent on the day.