Convoy? Toyota's Hino to Join Forces With Volkswagen's Truck Unit

Matt Posky
by Matt Posky

Volkswagen AG and Toyota Motor Corp are forming a truck-based alliance, allegedly to cut R&D costs. While the two automakers joust for the title of biggest in the world, their trucking arms must have had a rough 2017 to necessitate an alliance solely on the grounds to limit development expenditures… right?

Not exactly. Volkswagen Truck & Bus actually had a really good year. Strong sales pushed revenues up 12.1 percent, and operating profits before special items increased by 26.8 percent (for over $2.41 billion). Meanwhile, Toyota’s Hino saw operating profits improve by 21.5 percent. So why bother with the alliance of both truck builders saw strong returns based on their respective sizes?

Like car builders, commercial vehicle manufacturers are seeing elevated costs due to the development of lower-emission powertrains and automated technologies. However, both of these truck units have parent companies with very deep pockets and didn’t fare terribly after accounting for last year’s R&D expenditures, so another reason for the team-up could have something to do with achieving global domination by joining forces with a business that doesn’t compete in the same region.

VW Truck & Bus moved over 200,000 units last year, while the smaller Hino delivered about 170,000. But the important part of the equation is that the divisions did so without much market overlap. VW operates primarily out of Europe and South America, where its MAN and Scania brands dominate. While Hino also does a little bit of business in South America, the majority of its sales are spread across Asia, the United States, and Canada.

According to Reuters, the companies announced Thursday that they will consider cooperating in areas such as diesel and gasoline-electric hybrid engines, vehicle connectivity, and self-driving technologies. They also suggested that the combined output could offer economies of scale in research and development as well as procurement.

“We can join forces and spend R&D money only once instead of twice or three times,” explained Volkswagen Truck & Bus CEO Andreas Renschler in Tokyo this week. “We see potential to save on our budgets and also to combine our resources to be faster at bringing products to market than we would be alone.”

Look out, Daimler Trucks, AB Volvo, Paccar, and Mitsubishi Fuso Truck & Bus Corporation. Hino and Volkswagen Truck & Bus are coming for you through shared resources and fiscal conservation. We’re on pins and needles, frankly.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Twyxx Twyxx on Apr 13, 2018

    So how does Navistar/International Trucks fit in with all of this? Last I heard, VW owned 16%, with rumors of a complete takeover.

    • See 2 previous
    • Big Al from Oz Big Al from Oz on Apr 14, 2018

      @EquipmentJunkie Toyota/Hino also has more advanced EV technology for trucks. Remember VW wants this technology and is willing to pay for it.

  • Dukeisduke Is the Volvo EX30 even on sale yet? It was pulled from the NACTOY awards because they were having software problems with the vehicle.
  • Wjtinfwb If you've only got 5k to spend on transportation, I cannot imagine a worse way to spend it than on a GM orphan from Sweden that's 15 years old with 150k on the clock and limited plus expensive parts availability and dwindling techs who'd even want to work on it. Go find a similar vintage Camry or Accord with 150k miles or even a Ford or a Chevy, whatever. Hell, even an old Jaguar is less of a crapshoot than a Saab. At least you can still get parts.
  • Kwik_Shift Brands that were considered from China include BYD, Dayun, Great Wall Motors, Maxus, Nio, Omoda/Chery, Seres, XPeng, and Zeekr. KG Mobility from South Korea also made the list of candidates.That's a lot of car companies from there ready to head here.
  • Analoggrotto Clean sweep and unanimous victory for the world affluence engine of 22nd century : Hyundai/Kia/Genesis. Toyota and Lexus, for 120 years of history have not been able to capture the zenith superlative status of Hyundai Motor Corporation the most awarded, decorated and revered automotive corporation in the history of historical. Featuring best ever, first ever and greatest ever e-ATPs the Hyundai Genesis Kia lineup is posed to become the envy of every country club, ivy league college and fortune 500 corporation in the world. I've been taking a roadtrip in my loaner Elantra N, visiting colleges from east to west, elite universities of higher learning to inspect their parking lots. WHat did I find? Leagues of Genesis models, outnumbering Lexus 3 to 1. When I interviewed faculty and staff at these places of greater learning, their response was unanimous : they chose HMC for the ATPs.
  • Mikey 2019 Chevy Impala Premier FWD with 20 inch factory Bridgestones. I'm looking at replacing tires at the 65,000 KLM's (40,000 miles ) mark ....It doesn't thrill me .. I'm pricing Michelin Cross Climate 2 tires ouch !! ..Up here in Canuckastan ....Big $$$$$
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