May 25, 2007 -- Hino Motors Ltd. plans to open a factory in Columbia around fall 2008, which will make it the first Japanese truck manufacturer to establish a production base in South America, The Nikkei learned Thursday. The truckmaker is teaming up with Mitsui & Co. and local companies to build a joint venture factory, which is expected to have an initial annual output capacity of 4,000 to 5,000 vehicles. Eventually, it plans to boost capacity to 15,000 trucks a year.

Engines, platforms and other core components will be shipped from Japan for assembly at the Columbian plant. The trucks will then be sold in Columbia as well as other South American countries such as Venezuela, Ecuador, Peru and Chile. Japanese truck manufacturers' sales in South America tend to be limited due to import duties. For instance, small and midsize trucks are slapped with 10-15 per cent tariffs. As a result, Japanese firms have lagged behind such rivals as DaimlerChrysler AG and AB Volvo, which both operate production facilities in South America.

By building a factory in Columbia, Hino will be able to ship its trucks throughout South America duty-free. Hino, the Toyota group's truck specialist, is targeting global sales of roughly 96,000 vehicles in fiscal year 2007, of which it aims to sell roughly 55,000 abroad. After establishing local production bases in the U.S. and Canada in 2004 and 2006, respectively, Hino now aims to lift its total overseas sales to 150,000 units in fiscal year 2015 through its South America foray and other efforts. DaimlerChrysler's truck sales in 2006 totaled slightly more than 500,000 units, while AB Volvo's tally topped 200,000 on a groupwide basis.

Source: Asia Pulse
Source: Factiva