Are you a Hino truck operator? Or do you swear by Fuso? Fear not, says Toyota South Africa sales and marketing senior vice-president Leon Theron. The planned merger between the Japanese brands won’t rob you of choice. The two may benefit from shared costs and joint research & development, but they will continue to be marketed separately and in competition with each other.
Hino Motors is owned by Toyota and Mitsubishi Fuso Truck & Bus by Daimler Truck. The two parents and their subsidiaries recently signed a memorandum of understanding to merge Hino and Fuso into one company. They hope to sign a formal agreement by March 2024 and complete the integration by the end of the same year.
Theron says Toyota and Daimler Truck will each own 25% of the new entity, with the remaining 50% open for public purchase.
The parents say Hino and Fuso “will work together to improve operational efficiencies, including in development and production, and hone the competitiveness of Japanese commercial vehicle manufacturers”.
Priorities include the accelerated development and manufacture of new electric and hydrogen engines, as well as autonomous and automated driving, and improvements in automotive connectivity.
It’s not clear yet when benefits will filter through, but Theron says the merger “will be big for the Hino brand”, particularly its pursuit of zero-emission engines. Last year, the company was accused of falsifying emissions data on current vehicles.
Hino South Africa vice-president Anton Falck is already bullish about the immediate future. Early this year, the company forecast truck sales of 31,500 in 2023. Since then, it’s upped the stakes to at least 33,500 and possibly 35,000.
“The exact figure will depend on market and consumer response to increased interest rates, the declining exchange rate and various other challenges we are facing as South Africans,” he says.
Hino and Fuso ‘will work together to improve operational efficiencies, including in development and production’
Naamsa reports that in the first five months of this year, the aggregate local market for new cars and commercial vehicles grew by 3% over the corresponding period of 2022. That growth all came from commercial vehicles. Car sales were down 1.9% and light commercial vehicles, mainly bakkies and minibuses, up 14.4%.
Medium-sized trucks, weighing 3,501kg-8,500kg, gained 11.9%, heavy trucks (8,501kg-16,500kg) lost 13.9% and sales of extra heavies (over 16,501kg) rose 21.8%. Together, the three truck categories grew 11.6%.
One reason, says Falck, is the implosion of Transnet’s rail freight services, forcing customers to rely on road transport, particularly long-haul trucks, instead. This “suggests that demand for trucks will be strong for the next few years”.
He adds: “It’s clear we underestimated the market.” Some truck companies are struggling to meet this inflated demand.
Hino is among them. Its 5.8% sales growth in 2023 has lagged that of the overall market because of a lack of extra-heavy trucks. It’s done well in the medium and heavy categories but has had no extra-heavy products for two years.
That omission ended at the beginning of this month with the launch of the Hino 700 range. “Our dealer network and customers have been waiting for it for a long time,” says Falck.
Unfortunately, some may have to be patient a little longer. Hino’s Durban assembly plant, which has annual capacity for 5,000 trucks and plans about 3,500 in 2023, is building only two 700s daily, says Theron. That number is expected to grow.
Falck says: “We are aggressively promoting the Hino 700 and anticipate that over the next few years, it will help us establish a strong presence in the extra-heavy segment.”
Hino trucks, like those of their competitors, are assembled from imported kits — a process known as semi knocked-down. Only a few components, like batteries and wheels, are sourced from South Africa. Theron estimates that these account for 5% of the vehicle’s total value.
Because the South African market is so small, local content rules governing the manufacture of cars and bakkies don’t apply to truck companies. It’s simply not cost-effective to localise most parts. However, Theron reckons that when you add in labour, energy and other assembly costs, local inputs contribute about 30% to the total value.
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