Hino to streamline range with manuals out
BY COBEY BARTELS | 13th May 2024
RECENTLY appointed Hino Australia president and CEO Richard Emery, who previously held high-level positions at Mercedes-Benz and Nissan, is preparing to shake things up with a rationalised truck range.
Now entering his third month as the first non-Japanese leader at the helm of Hino Australia, Mr Emery shared his plans to streamline the local Hino range with GoAuto at a business briefing in Sydney, including eliminating manual transmissions in the name of efficiency.
While the number of 300 and 500 Series variants will be slashed, the 700 Series heavy truck range is likely to expand, including the potential for a currently Japan-only hybrid driveline option to enter this market.
“We’re rationalising our line-up to make it more simplified,” Mr Emery told GoAuto.
“We’ll pull our line-up back probably by 40 per cent, and of that 40 per cent half of that will be manual gearboxes because, every year that goes past, less and less people can drive one.”
While planning to condense the light- and medium-duty range, Mr Emery said the heavy-duty 700 Series line-up is likely to grow as Hino turns its attention to its heavy hitters.
“We think the 700 Series is a better truck than what we’re getting in terms of our volume returns on that,” he said.
“We’re slicing and dicing the 500 and 300, but the 700 Series will probably expand over the next few years.”
Hino’s light-duty 300 Series Hybrid has seen strong sales growth across the past 12 months, following a renewed marketing push and revised pricing, and Mr Emery says the 700 Series Hybrid – currently only available in Japan – is now a possibility Down Under too.
“The 700 Series Hybrid is a really interesting one,” he said.
“I like the idea of it, I think it’s got really good application opportunities in Australia and, while it was designed specifically for domestic Japan and some specific customers, it just so happens I think there are some applications in Australia that mirror what they’re using it for.
“We had some dealers and customers in Japan in October (2023) and we introduced them to the 700 Hybrid rigid, and we had some key clients who said, 'well look, if you had that in market, firstly we’d love to trial them to see if they can do what they’re built to do, and assuming they do that we’d be really interested'.”
Mr Emery said this interest led to the 700 Hybrid being “certainly now on the table between us and HML (Hino Motors Limited)”.
The effect of the line-up cuts on total sales will be minimal, Mr Emery points out, with many of the outgoing models contributing mere two-digit numbers to the truck-maker’s total Australian volume.
“This is probably the right breakpoint to do a bit of slashing and burning, but obviously you weigh up what impact that has on your volume versus patenting, building, stocking, shipping – and we’ve already started to do that,” he explained.
“And just to give you an example, so we’re calling this close to 40 per cent, but just take those 40 per cent of trucks and look at the volume – it’s about 400 trucks.”
Mr Emery says the line-up’s diet will likely conclude around the same time as the range-wide transition Euro VI, suggesting it will be completed within two years.
“It’s an absolute transition, so there are already a couple of products we’ve told dealers that we no longer take orders for and that’ll continue over the next six to 12 months,” he said.
“It’ll probably be finalised when we launch the Euro VI line-up, and that’s going to be gradual, model-line by model-line, but it’s probably an 18-month to two-year transition.”
The move comes as the truck market begins to show signs of cooling, off the back of a three-year boom period and soaring demand that saw ranges bulge, and Hino is aware that low-volume models may not weather the downturn.
“We’ve been through a business phase, not just Hino but across the whole industry, of filling every gap in the market with a product and that’s okay but, at some point in time, that’s inefficient,” Mr Emery said.
“It’s inefficient from an ordering and stocking perspective, and it’s inefficient with the engineering when you’re going to transition from Euro V to Euro VI – it just doubles the work you’ve got to do.
“From my perspective, that’s an issue Hino are having globally and we are aligned on that, both from an expectation from us and welcomed by Japan, because it just eases their work and allows them to concentrate on the trucks that really make a difference to us.”
Shifting sands
Coming into the role as the first non-Japanese leader of Hino Australia, Mr Emery said alignment with the global leadership team was his first priority – which is not a new concept to him, having undertaken similar roles with Japanese OEMs like Nissan.
“I think the biggest role was to get some alignment between what I felt and how I'd like to approach the business strategically over the next period of time, and to get that aligned with Japan,” he told GoAuto.
“I've been to Japan in the last three weeks, and that was all about aligning the aspirations and leadership style that I was going to bring to the business with Japan's expectations.
“So it was important in the first 60 days to lay out how I'll approach the Hino business in Australia, and what my expectations and aspirations are, marrying them with Japan's attitude towards Australia and what they want us to achieve.”
Mr Emery also focused on setting expectations with the dealer network – as he plans to make significant changes to the range – but says the fundamental approach at Hino Australia will not change.
“I've been out and about at the dealers showing them that our approach fundamentally doesn't change and I explained to them that I'm working with the same deck of cards that any previous leader had, but obviously I'm going to play poker a little bit differently,” he said.
While the truck market is a different beast to the passenger car market Mr Emery cut his teeth in, he says the similarities at a macro level make him a suitable candidate as he strives to future-proof the local operation.
“Yes, the truck business is certainly different to the passenger car business that's formed the majority of my 35 years in OEM-land, but the fundamentals about running or steering an automotive distribution business in a market like Australia are pretty similar,” Mr Emery said.
“The industry is going to have a difficult few years, because we had a surge market that is clearly going to settle now, we’ve got some legislative challenges and certification issues around the transition from Euro V to Euro VI, and we’re looking to simplify the model line-up.
“It’s about being methodical, sticking to the basics, simplifying the business as much as we can and making it robust for the future, because I think the whole industry has rested on its laurels a little bit over the last three or four years,” he said.
Despite plans to simplify its range ahead of what Mr Emery says will be a tough few years across the truck market, the order bank at Hino remains strong with around a year’s worth of deliveries to fulfil – but he is not banking on existing sales.
“If you look at what our production scheduling is, and our retail expectations, and then match that with our actual order bank, on a macro level it's 10 to 12 months,” he said.
“I could say 2024 is going to be easy, but I know that things will soften a bit and I know we will have some changeover issues moving from Euro V to Euro VI … so there’s going to be some curveballs and I need to make sure the business is on its toes to be ready for that.”
