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When East meets West

22nd July 2004, Page 20
22nd July 2004
Page 20
Page 20, 22nd July 2004 — When East meets West
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Which of the following most accurately describes the problem?

Speculation is rife that Hino is

gearing up to stake a claim in a

European truck builder. Oliver

Dixon reports.

Well placed sources in Tokyo have told Commercial Motor that Hino is preparing to take a stake in a European truck manufacturer. The timing for this move seems to be based around the problems currently confronting Mitsubishi Fuso.

Hino, it is believed, now sees a window of opportunity to exploit Mitsubishi's problems by expanding in Japan — and establishing a presence within the 7.5 to 18-tonne European retail sector.

Industry consolidation over the past few years has reduced the number of truck manufacturers in play, and three companies are likely to be under consideration: MAN. Iveco and Scania.

Of the three. Iveco is the least likely target. Leaving aside the ongoing reorganisation of the company put into place by new boss Jose Maria Alapont, Iveco's product range, which majors on the light end, would provide little or no fit with Hino's.

The same argument applies to some extent with MAN. The German builder is weaker at the lighter end than Iveco, and the Hino 7.5-18tonne range would offer a good fit.

Outside the EU, MAN manufactures in South Africa, Turkey, and Belarus, and has a joint venture with Indian manufacturer Bajaj Tempo.This offers little scope to a larger builder looking to develop a global truck operation.

All of which leaves Scania as the only plausible target. The two companies already have a strategic cooperation agreement. and Scania was the first European manufacturer to obtain Japanese type approval for a tractor unit.At the onset of this deal both parties alluded to wanting a long-term business alliance to increase the market potential for both companies Scania's subsequent deal with MAN on cornponentry may have served to distract attention away from the burgeoning Hino relationship. But for Hino and, in a broader context, for Toyota, tying Scania down would now seem to make a lot of sense

Mutual benefit

The reasons for this lie on both sides of the Atlantic. In Europe the so-called retail sector is one that makes money — witness the success of Isuzu over the past few years. This sector is poised for greater growth as non-traditional transport buyers embrace a more consumerorientated approach, such as that espoused by Isuzu. Moreover, Scania dealerships have nothing to sell below 18 tonnes.

Offering Scania dealerships a lightweight range to sell would do much to increase new and afterrnarket revenue streams.

Within the United States Hino is already an established, if small, player. With a product range across Classes 4-7, it sold 1.979 vehicles last year, over half of which were rated Class 6. Not having a Class 8 product might be holding back the US arm of Nino.

Enter Scania, and its Mexican-built — and therefore free-in-circulation — T-cab, soon to be relaunched as T Series. Hino has recently restructured its US distribution company, Hino Diesel Truck, to increase its presence in the market.

It is also planning to extend its dealership network and launch new products more adapted to US customers, Bear in mind that, as it has adopted FOR on all but its highest output vehicles, Scania could launch in advance of the EPA 07 emission limit with little re-engineering.

At present this is all rumour: Scania is saying nothing. However, Volvo's divestment of its stake in Scania means that a new company, Ainax, is being traded actively in Sweden. Over 50% of these shares are held in small (sub 2 To) parcels, so they're accessible. And Toyota, which owns 50% of Hino, has global ambitions within the automotive sector.

Acquiring Scania would give Hino almost immediate access to the global truck market and would provide Toyota with the cachet implicit in being seen as a global CV producer — something only DainderChrysler can currently claim to be. •


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