Hino Motors Ltd., part of the Toyota Group, has registered an impressive performance in FY13, clocking record sales across heavy-, medium-, and light-duty truck segments, driven by a strong showing in its home Japanese market. The company’s total sales of trucks and buses has grown by 19.3 per cent from the previous fiscal, as it continues working towards making its plant at Koga in the Ibaraki prefecture of Japan fully operational in the coming years. We trace Hino Motors’ growth over the last fiscal and get details on the company’s future plans.
Total demand for heavy and medium-duty trucks in the Japanese market increased to 68.5 thousand units by 9.2 thousand units (15.5%), while the total demand for light-duty trucks increased to 75.6 thousand units by 10.3 thousand units (15.8%), due to reconstruction demand, the eco-car tax reduction/subsidy measure, etc. Our share in the market of heavy and medium-duty trucks for this consolidated fiscal year was 36.1%, hitting a record high, and we achieved the largest number of registered trucks for 40 consecutive years, as a result of sales activities implemented in a concerted effort by a group from customer’s standpoint. Our share in the light-duty truck market reached 21.7%, hitting a record high, as a result of active sales promotion of new “Hino Dutro” which was released last year. As for Japanese domestic sales volume, the total sales volume of heavy-, medium-, light-duty trucks and buses increased to 44.0 thousand units by 6.7 thousand units (17.9%) from the previous fiscal year.
As for overseas markets, due to the favorable sales in Asian countries such as Indonesia and Thailand, and also the popularity of the small model “Hino 300 Series” which was released last year, the sales volume of trucks and buses outside Japan for this consolidated fiscal year increased to 108.1 thousand units, hitting a record high, by 17.9 thousand units (19.8%) from the previous fiscal year.
As a result of the above, total unit sales of Hino Brand trucks and buses increased to 152.1 thousand units, hitting a record high, by 24.6 thousand units (19.3%) from the previous fiscal year.
As for the volume of sales to Toyota Motor Corporation, mainly the sales of “Land Cruiser Prado” increased due primarily to the recovery from Great East Japan Earthquake and the flood in Thailand, total sales volume increased to 185.8 thousand units by 32.5 thousand units (21.2%) from the previous fiscal year.
As a result of the above, net sales were ¥1,541,357 million, which is an increase of ¥226,769 million (17.3%) as compared to the previous fiscal year. As for profits, our business was affected by increased costs due to structural reforms and an increase in the number of units produced and sold, and also the strong yen in exchange rates, but sales increased, and also profitability improved and cost was reduced as was the case last year. Consequently, consolidated operating income increased to ¥65,118 million which is an increase of ¥27,590 million (73.5%) as compared to the previous fiscal year. Ordinary income increased to ¥66,922 million which is an increase of ¥32,345 million (93.5%) as compared to the previous fiscal year. Net income increased to ¥47,685 million which is an increase of ¥31,381 million as compared to the previous fiscal year. Moreover, net sales and all profits achieved record highs.
Forecasts for year ending March 31, 2014
Demand in the truck and bus market in Japan is estimated to be healthy, and we expect that the demand in the overseas truck and bus market as a whole will grow steadily mainly in emerging countries in Asia, although the pace of growth is expected to slow down.
Furthermore, profitability is expected to drop due to higher costs of crude oil and materials from weak yen trend in exchange rates. However, we intend to make an effort to increase profitability and implement cost improvement activities.
Global production system
Hino will step up establishment of its global production system. Koga Plant (Koga City, Ibaraki Prefecture), where the KD plant commenced operation in May 2012, will support the global production and supply system as the base for Hino’s future craftsmanship and technological development, and is planned to commence total operation in 2016 as the vehicle assembly plant, following the axle plant scheduled to commence operation in 2014.
Hino believes it is essential to continually provide quality products and services in a timely manner so that the Hino brand is globally established as the customers’ manufacturer of choice, and for Hino’s continuous, global growth. Therefore, based on Hino’s strength – QDR (Quality, Durability, Reliability) Hino will provide fuel-efficient and low-running-cost products that meet customers’ needs with minimum lead times. Furthermore, Hino will strengthen total support for its customers by maximizing their vehicle’s operational potential.
In order to deliver quality products to customers even quicker, Hino is moving forward with its development of locally-compatible products based on modularization following its mid-term management plan (2012-2014) and global optimization of its production-supply system, which also includes the efforts to reorganize domestic production processes currently located in three plants, in addition to transfer from Hino Plant to Koga. New production technologies will be established at the Koga Plant – the “mother plant” – and by extending these to Hino’s overseas plants, Hino aspires to respond to customers’ diverse needs, which are characteristics of commercial vehicles, with minimal lead times.
Therefore, Hino will begin to incrementally commence operation of its heavy- and medium-duty vehicle assembly plant from 2015, which is located in Hino Plant currently, and have the Koga Plant fully operational during 2016. However, the final completion of the transfer from the Hino Plant, including the reorganization of domestic processes, is anticipated in no later than 2020, as initially scheduled.
Also, as Hino’s vision for the future, it also intends to examine creating a process for customizing truck beds on-site at the Koga Plant in order to further shorten the lead times in delivering completely built units from the manufacturer to customers.
At the Koga plant, through developing innovative new production technologies, Hino also contributes to the development of craftsmanship technologies and skills in Japan. Also, in addition to introducing high-efficiency, flexible production lines that make it easy for women and senior citizens to work, Hino aspires for the plant to be a “locally friendly,” “environmentally friendly” and “labor friendly” as well as sustainable, focusing on the reduction of CO2 emissions, etc.
Hino continues to seriously listen to the opinions of its customers and strives to be locally rooted and trusted by its customers through its outstanding customer services.
Therefore, the earnings forecast for the next term is as follows:
Net sales ¥1,620,000 million
Operating income ¥85,000 million
Japan unit sales of trucks and buses 44.6 thousand units
Overseas unit sales of trucks and buses 130.0 thousand units
Unit sales of Toyota brand vehicles 172.0 thousand units