This article provides an historical analysis of the relations between the Toyota Motor Company and Hino Motors Limited, relations which formally began in 1966. Through such analysis, light can be shed on the general characteristics of tie-ups between vehicle manufacturers.
Three basic areas are covered. First, Hino's failure in the small automobile sector is discussed. In the 1950's Hino was a specialist manufacturer of large trucks and buses. In 1961, it tried to enter the small car sector but, faced with severe competition, made an ungraceful exit and was left with a large investment in small car assembly equipment.
Second, the tie-up with Toyota is examined. Through this tie-up, Hino was restored to its former position as a specialist in the large truck and bus field, and Toyota was able to utilize Hino as a subcontracting assembler of Toyota brand automobiles. This arrangement was good for both companies. Partly because of the benefits of specialization, Hino's market share gradually rose and it eventually reached the top position in its sector. For its part, Toyota was able to increase production through the subcontracting arrangement.
Finally, the shift in the nature of the tie-up is considered. In the 1970's, as Japan's economy moved from high to low growth, the domestic demand for large trucks and buses began to stagnate and Hino suffered as a result. At the same time, needless to say, Toyota increased small car production through the expansion of both domestic and export markets.
In general, this episode points out some of the long term factors involved in selection and bargaining between partners in vehicle manufacturing tie-ups.
