Toyota Takes Control of Hino
March 10, 2000
Toyota Motor Corp said Friday it will pay 25 billion yen ($234.7 million) to take control of Hino Motors Ltd , Japan's largest truckmaker.
Toyota will raise its stake in Hino to 33.8 percent from 20.1 percent by buying 76.7 million newly issue shares, giving it management control of the money-losing truckmaker.
Toyota has said since May 1998 that it intended to raise its holding in Hino, which makes about one in every three heavy trucks sold in Japan. Japanese newspapers have reported Toyota intends to raise its stake to over 50 percent in the future.
"It's a natural for Toyota to strengthen its group ties when Ford and GM are also expanding their reach," Merrill Lynch auto analyst Takaki Nakanishi told Reuters.
Last year France's Renault SA gained a controlling stake in Nissan and this week Japanese media reported that DaimlerChrysler is set to about a 30 percent stake in Mitsubishi Motors Corp , Japan's fourth-largest automaker.
Hino Motors expects to post a parent net loss of 15.2 billion yen for the year ending this month. It lost 35.1 billion on the same basis last year.
"Through our greater equity link with Toyota, we hope to speed up our restructuring process," Hino President Hiroshi Yuasa told a news conference. Yet he did not rule out the possibility of a future tie-up with a foreign maker.
Like all of Japan's truckmakers, Hino's sales have dwindled amid the economic recession of recent years. Sales of heavy trucks fell to about 80,000 last year, half of the 1990 peak.