Let us know about free updates
Toyota and German Daimler Truck have confirmed an estimated $6.4 billion merger of Japan’s heavy commodity vehicle business in response to growing competition with Chinese rivals competing in line with electrification and autonomous driving technology.
The agreement links Toyota unit Hino Motors with Mitsubishi Fuso Truck and Bus, a subsidiary of Daimler Truck. It will create a Japanese commercial vehicle powerhouse that sells more than 200,000 units a year and is selling more widely to invest in hydrogen trucks and buses.
The merger comes as the global commercial vehicle industry moves rapidly towards electric and hydrogen-powered drivetrains and autonomous driving, with China taking the lead.
Trucking, featuring long operating ranges, heavy loads and short refueling times, is considered a key sector for creating a large market for hydrogen fuel cells, as passenger car transport for cleaners is dominated by battery-powered electric vehicles.
Robin Zeng, the billionaire behind China’s battery champion CATL, predicted last month that half of the new trucks sold in China over three years have become electricity, highlighting a dramatic change in the heavy commodity vehicle market.
Recommended
“By bringing together the two strong partners, we will set up even stronger companies and promote decarbonisation in transportation,” said Karin Rådström, CEO of Daimler Truck. “Scale is the key to winning in technological transformation of the industry.”
The total group – led by Carl Deppen, headed by Mitsubishi Fuso CEO – divides Japanese commercial vehicle manufacturing into two major camps, with Isuzu Motors dominating the other camps.
Toyota and Daimler Truck, the world’s largest truck manufacturers, hold 25% stakes evenly in their holding companies, but Japanese vehicle manufacturers have a lower voting rights at 19.9%. Jefferies analysts estimate 11 times the revenue before interest and taxes is 5.6 billion euros.
After a preliminary merger agreement was reached in May 2023, the transaction was postponed to February 2024 following the engine data forgery scandal at HINO.
Earlier this year, Hino agreed to a $1.2 billion settlement with US authorities, leading the truck force to record net losses, but helped pave the way for the merger.
Since the deal was first announced, the companies have lost their position in the truck market, and US tariffs on imports have added to the challenges commercial vehicle manufacturers face.
The seal of the contract comes at a time of major upheaval for Toyota as the world’s largest automaker prepares to join Toyota Industries’ $33 billion take private, one of its major suppliers.
Along with the contract, HINO will transfer ownership of the Tsukii plant to Toyota Motor for 150 billion yen ($1 billion). The world’s largest automaker produces 250 Hilux and Land Cruiser vehicles there.
The merger also adds to an increase in cooperation between Japan and Germany over hydrogen. The two companies list Japanese holding companies and aim to begin operations by April next year.
Additional Reports by Kana Inagaki in London
