Hino Motors and Mitsubishi Fuso Truck and Bus Corporation have reached a final agreement to merge their operations in April 2026, but what will this mean? A basic agreement was initially reached in 2023, but the decision was delayed due to irregularities in Hino’s engine performance certifications. The merger will finally move forward following Hino’s settlement with U.S. authorities.
The commercial vehicle industry has undergone rapid changes over the past two years of stalled negotiations, so both companies will need to quickly demonstrate the benefits of the merger to make up for lost time. The biggest change is the tightening of environmental regulations.
In May 2024, the European Union (EU) strengthened CO₂ emission regulations for large trucks. By 2030, emissions must be reduced by 45% compared to 2019 levels. This is an increase from the previous target of 30%. By 2040, emissions must be reduced by 90%, a very strict requirement.
To meet these regulations, electrification and the use of hydrogen fuel will be considered. Hino Motors and Mitsubishi Fuso have been developing technologies with the support of their parent companies, Toyota Motor Corporation and Daimler Trucks, respectively. However, they must now quickly leverage each other’s expertise.
Autonomous driving is also a key challenge for next-generation technology. Competition to develop this technology is intensifying worldwide, and Japanese companies must avoid falling behind.
There is a serious shortage of drivers in Japan, so early practical application is necessary. While ensuring safety is a prerequisite, we hope that national and local governments will cooperate in implementing this technology.
Japan’s commercial vehicle manufacturing industry has long been dominated by four companies. In 2021, Isuzu Motors acquired UD Trucks, consolidating the number of companies to two. However, on a global scale, the rapid growth of Chinese manufacturers stands out. Even when combined, the sales figures of Hino and Fuso only rank 10th in the world.
The contraction of the domestic market is inevitable, so Hino and Fuso must seek growth opportunities overseas. Compared to Isuzu, which has a strong foothold in Thailand, Hino and Fuso are lagging, making overseas expansion an urgent priority. Facing numerous challenges, the newly merged company can no longer afford to pause.
Source: The Nikkei
PSR Analysis: The primary objective of the merger between Hino and Mitsubishi Fuso likely is expanding their market share. For either company to act alone, addressing the regulations mentioned in the article would be extremely challenging. The merger aims to maximize synergies, reduce costs in procurement and production, and maximize profits. Although specific details have not been announced, the merger will likely extend beyond standardizing unit parts to include standardizing platforms.
Regarding electrification, electric vehicle (EV) trucks face various challenges, such as operating range and weight. However, fuel cell (FC) technology offers a more viable solution to these issues. Toyota already has a proven track record in developing fuel cell (FC) systems. And Isuzu, a rival to Hino and Mitsubishi Fuso in the truck and bus sector, announced in May 2023 that it had selected Honda as its partner for developing and supplying fuel cell systems. To compete with rivals like Isuzu, Hino and Mitsubishi Fuso may find it advantageous to adopt Toyota’s fuel cell systems to shorten development timelines. I believe the integration will include such collaboration possibilities. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
