Daimler Truck Holdings and Toyota Motor Corp have agreed to combine their truck manufacturing businesses in Japan.

The deal sees Daimler Truck, Mitsubishi Fuso, Hino and Toyota Motor Corporation sign a memorandum of understanding (MoU) on the merging of truck and bus manufacturers Mitsubishi Fuso and Hino Motors.

The two companies will be merged on an equal footing with the transation set to be completed by the end of 2024.

Their brief is to collaborate in commercial vehicle development, procurement and production and to build a globally competitive Japanese commercial vehicle manufacturer.

Under the agreement Daimler Truck, MFTBC, Hino, and Toyota will also work to achieve carbon neutrality, develop connected, autonomous, hydrogen and electric technologies and strengthen the commercial vehicle business on a global scale.

Details on the scope and nature of the collaboration including the name, location, shareholding ratio and corporate structure of the new holding company will be decided over the course of the next 18 months.

The parties envisage plan to sign definitive agreements in the first quarter of 2024 and aim to close the transaction by end of 2024.

The merger comes just over a year after an investigation found that Hino had falsified emissions and fuel economy data going back to 2003. The company became a Toyota subsidiary in 2001.

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Announcing the deal the partnership said: "By joining forces, MFTBC and Hino would create synergies and enhance the competitiveness of Japanese truck manufacturers, helping to strengthen the foundation of the Japanese and Asian automotive industries and contributing to their customers, stakeholders and society."

Martin Daum, Daimler Trucks chief executive, added: “We at Daimler Truck are very proud of our products, because trucks and buses keep the world moving. And soon they will even do so 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.

"The planned new company will be a major force in Southeast Asia and an important associate of the Daimler Truck family.”

Koji Sato, Toyota Motor Company chief executive, said: “This collaboration among our four companies is a partnership for creating the future of commercial vehicles in Japan and the future of mobility society.

"Our four companies will work together with a shared vision of achieving carbon neutrality by strengthening CASE (connected/autonomous and automated/shared/electric) technologies and of changing the future of commercial vehicles and building the future together by solving social issues.”

Karl Deppen, Mitsubishi Fuso Truck and Bus Corporation chief executive, said: “This close collaboration will enable us to accelerate the decarbonization of the transportation industry, creating an even stronger Japanese commercial vehicle manufacturer. Under the two well-established brands of FUSO and HINO, we will continue to take a leading role in serving customer needs in Japan, Asia and beyond.”

Satoshi Ogiso, Hino chief executive added: "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. Through these efforts, we will strive to tackle societal challenges such as achieving carbon neutrality.”