With an eye on emissions, Toyota and Daimler to unite on trucks in Japan

May 30 (UPI) -- Japanese automaker Toyota said Tuesday it signed a memorandum of understanding with Daimler Motor Holding to combine forces in the truck market in Japan.

Daimler's Mitsubishi Fuso Truck and Bus Corp. will merge with Hino Motors Ltd., a Toyota subsidiary, as a combined holding company, according to the terms of the non-binding agreement.

All parties involved said the proposed merger would help with the transition away from fossil fuels.

"We will unite our aspirations to support mobility and contribute to society and, hand in hand, accelerate advanced technology development in order to overcome the increasingly fierce global competition," Hino CEO Satoshi Ogiso said. "Through these efforts, we will strive to tackle societal challenges such as achieving carbon neutrality."

Toyota's hydrogen fuel-powered Mirai line took second place in terms of market share for hydrogen vehicles this year, behind Hyundai's Nexo.

Compared to electric vehicles, hydrogen vehicles have not shown as much success in garnering customers for the eco-friendly market, particularly outside models such as the sedan, but the sector has been expanding.

Martin Daum, the head of Daimler's truck division, said it's heavy-duty vehicles like trucks and buses that keep the global economy moving, and those vehicles will soon move with zero emissions.

"So there is a great future ahead -- and today's announcement is a crucial step in making that future work economically and in leading sustainable transportation," he said. "The planned new company will be a major force in Southeast Asia and an important associate of the Daimler Truck family."

The transportation sector is highly polluting, though the Japanese government attributed declines in emissions to a reduction in production in the manufacturing sector as well as a decrease in passenger and freight traffic.

Toyota said the details of the merger would evolve over the next 18 months, though the goal is to close the deal by the end of 2024.

"Once all parties involved reach an agreement, they will move forward based on the approval of the relevant boards of directors, shareholders, and authorities," the company said.