Toyota Motor Corp. and Daimler Truck Holding AG said Tuesday they will merge their truck subsidiaries in Japan by the end of 2024 to speed up the development of advanced environmental and safety technologies and share the hefty costs.
Toyota's subsidiary Hino Motors Ltd., and Mitsubishi Fuso Truck and Bus Corp., a subsidiary of the German company, will operate under a holding company to be set up by the two parent companies.
The new company will be listed, though details such as when to go public and what stake Toyota and Daimler will hold after the listing were not disclosed. Hino will no longer be a subsidiary of Toyota. Toyota owns 50.1 percent of Hino and Daimler Truck 89.29 percent of Mitsubishi Fuso.
As part of new joint projects, the four automakers will share their technology to develop new zero-emission systems, such as hydrogen-powered commercial vehicles.
"We will accelerate efforts to bring hydrogen-powered mobility to the mass market with commercial vehicles," Toyota President Koji Sato said at a press conference.
Global automakers are ramping up investment in connected, autonomous, shared and electric vehicles, known as CASE, to meet stricter emission rules and offer new vehicle services.
Forming alliances is becoming more important for commercial vehicle makers in particular, as their production volumes are smaller than traditional automakers, and they find it difficult to produce economies of scale on their own.
At the press conference, Daimler Truck chief executive Martin Daum said that behind the merger is a pressing need for automakers to invest a massive amount of money into multiple technologies, ranging from battery-driven to fuel-cell vehicles.
Industry experts say hydrogen-powered systems are a better fit for commercial vehicles, such as trucks and buses, than EV systems, as massive batteries would be needed to move heavy-duty vehicles.
The truck-making unit of Toyota suffered a record net loss of 117.6 billion yen ($838 million) in the fiscal year ended March 2023, hit by an engine data falsification scandal. Hino booked a massive one-time loss to cover compensation to its customers and suppliers and recall costs.
"It is difficult for Hino to do everything to achieve carbon neutrality on its own," Hino President Satoshi Ogiso said at the press conference. "This framework is a once-in-a-lifetime opportunity for us."
The deal came as Toyota, which makes cars and light trucks, struggled to find greater synergies with Hino, which became a Toyota subsidiary in 2001.
"There is so much we can do to support Hino in the commercial vehicle business," Sato said. "We will build a better Hino with advice from Daimler Truck and Mitsubishi Fuso" under the new framework.