Commercial Vehicles Face Challenges in Southeast Asia Amid Market Deterioration and Decarbonization Trends
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Challenges in Commercial Vehicles Industry persist! Isuzu adapts, Hino faces losses. 2024 merger with Mitsubishi Fuso sparks intrigue. Navigating global trends and decarbonization.
Dec 6, 2023 - Despite making strides in addressing the semiconductor shortage in 2023, the commercial vehicle industry encountered challenges due to worsening market conditions in key countries like Thailand and Indonesia. Notably, Isuzu Motors adapted with increased profits, while Hino Motors faced losses from compensation for engine certification fraud and lawsuits. The impending merger of Hino Motors and Mitsubishi Fuso Truck and Bus in 2024 is intensifying industry scrutiny.
Both Isuzu and Hino Motors revised their global sales plans for the fiscal year ending March 2024 alongside the April- September 2023 financial results. Isuzu, dominating over 40% of Thailand’s pickup truck market, witnessed a 42% sales drop in the country during this period. Hino Motor’s truck sales in Indonesia declined by approximately 17%, and sales in Thailand dropped by around 23%, attributed to stricter loan screening and low resource prices.
Acknowledging the challenging market conditions, Yasushi Nakano, CFO of Hino Motors, remarked that the situation "will not bottom out this fiscal year." Fumiya Yamakita, VP of Planning and Finance at Isuzu, anticipates a recovery in the Thai market around the second half of the fiscal year ending March 2025.
Global decarbonization trends are adding complexity to the commercial vehicle industry. Toyota Motor Corporation and Germany's Daimler Trucks announced plans to integrate subsidiaries Hino Motors and Mitsubishi Fuso in May. The collaboration aims to expedite decarbonization efforts, but challenges such as telematics technology, autonomous driving, and semiconductor procurement persist.
Kei Hayase, Partner at EY Strategy and Consulting, highlights positive visibility for the industry in the medium to long term, emphasizing the need for addressing global challenges like climate change. He notes that industry players must find solutions to meet the increasing demand for the movement of goods amid evolving social issues.
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Source: Nikkan Kogyo Shimbun
