TOKYO, Japan – Hino Canada has seen sales surge 40 per cent so far this year. Meanwhile, back home in Japan, Hino is enjoying its 31st consecutive year as leader of the medium duty market segment.
And while it hasn’t yet reached that position here in Canada, the company is closing in on its rivals and expects to continue making headway with its switch to a conventional-style design.
Hino this year reached its highest market share ever in the Canadian medium-duty segment – roughly 16 per cent. However, the manufacturer has yet to surpass one per cent of the medium-duty market in the U.S.
Yoshihide Maeda, senior executive officer, product strategy with Hino Motors, says the brand has enjoyed more success in Canada because Canadian customers have traditionally been more open to Hino’s COE design than U.S. buyers.
Now that the company has made the switch to a conventional design, he expects the U.S. market to pick up. He also attributes Hino’s success in Canada to a strong dealer network.
Hino’s conventional trucks are considerably less expensive to purchase than traditional COEs, and they deliver far better fuel mileage, he claimed. North American drivers also tend to prefer them due to the ease of getting in and out of the cab and for driver comfort reasons.
As Hino continues to broaden its product range in North America, it has set ambitious sales targets which include doubling sales on this side of the pond within two years. Hino sold just under 5,000 units in North America this year, but the company said that should reach 10,000 by 2006.
The company is currently shifting production of its medium-duty conventionals to Long Beach, Calif., and by the end of 2004 all North American trucks will be built there.
As this issue of Truck News went to press, Hino was still building about three conventional trucks per day at its Hino, Japan plant, while the Long Beach plant (originally operated by parent company, Toyota) was producing between 15 and 20 trucks per day.
Yuzuru Ishikawa, assistant manager, Americas, Middle East, Euro and Africa group, said the current capacity of the Long Beach, Calif. plant is 20 units per day, but “we can increase that production capacity.”
While the cost of Hino trucks won’t likely vary as a result of the change of production facilities, Maeda said Hino aims to deliver continuously decreased life-cycle costs including improved fuel mileage – so customers can expect to get more bang for their buck.
Another way Hino intends to increase its appeal to North American customers is to continue offering new options and enhancements. For example, air ride suspensions, which are a new option for Hino customers in Canada. Air ride suspensions have been available in Japan for more than 10 years now, where they have become standard on Hino’s domestic heavy duty trucks, and all but a standard spec’ on the company’s medium duty offerings. Hino has also introduced a front air ride suspension in the Japanese market.
A plethora of new safety enhancements is also in the works in Japan, and many of those will eventually be introduced in North America.
As with most North American manufacturers, Hino has opted for exhaust gas recirculation (EGR) to meet 2007 North American emission standards. And even though the company hasn’t ruled out selective catalytic reduction (SCR) for 2010, officials say they hope to avoid using the costly technology.
SCR is already used by other manufacturers in Japan, but Maeda said it’s not necessarily the best option.
“We are researching the urea system,” Maeda acknowledged. However, he says, next year Japan will introduce the strictest environmental regulations in the world and Hino will still be able to meet these targets using EGR coupled with a diesel particulate filter and the company’s common rail injection system.
While Hino hasn’t ruled out SCR to meet 2010 emissions standards in North America, Maeda says the company is also exploring NOx absorption as a possible solution.
“We have developed NOx absorption catalysts for our light-duty domestic market in co-operation with Toyota,” he said.
The U.S. Environmental Protection Agency (EPA) has been reluctant to approve SCR in North America largely due to concerns over enforcement. In Japan, however, manufacturers pushing for SCR have found a solution to this by only enabling the vehicle to be started if there is urea in the tank.
Still, Maeda pointed out that drivers can find themselves stranded if they run out of urea when no supply is nearby, or they can simply leave the truck running when the tank dries up in which case they’re still polluting the environment. (The truck will continue to run even without urea until it is turned off).
In addition, SCR is a more complex and heavier alternative, consisting of several catalysts, Maeda pointed out. Hino’s current system features a diesel particulate filter that’s the same size as a traditional muffler and weighs only 20 kgs more.
Continued growth at home
Hino may have its sights firmly set on the North American medium duty truck market, but it’s also strengthening its position at home. Hino has been building medium duty trucks domestically for 62 years and has been the market share leader for the last 31. It currently holds about 31 per cent of the domestic medium duty market, and in recent years it has also become more of a player in the heavy duty market as well. (Hino officials say they have no immediate plans to build Class 8 trucks in North America, but they didn’t rule that option out for the future).
In 2004, 85 per cent of Hino’s revenue was generated from the domestic market while North American sales only represented 1.6 per cent of the company’s revenue. Hino hopes to increase sales in both markets, projecting overall sales of 150,000 units worldwide by 2010.
“We want to keep the top position in the domestic market and we are going to cultivate new markets and introduce new products,” said Yumiko Kawamura, assistant manager, Hino’s Americas Department.
Shuichi Kaneko, manager of Hino’s Americas Department, added translating Hino’s domestic success to North America will hinge on the company’s ability to continue reducing life-cycle costs for users while introducing superior products and services. First, he said, they must establish better brand recognition.
“Here, everybody knows about Hino, but in North America very few people know Hino is a truck manufacturer,” he acknowledged.
“Our objective is to let people know who we are. We must establish the brand name of Hino first and visibility is the most important part.”