By Max Bernhard
Volkswagen AG's (VOW.XE) truck-and-bus unit and Toyota Motor Corp.'s /zigman2/quotes/200537742/composite TM -1.10% Hino Motors Ltd. (7205.TO) plan to explore cooperation on research and technology in a move to save costs and improve their market positions.
The strategic cooperation will help Volkswagen expand its share of the growing Asian truck market, ahead of a potential billion-dollar IPO of its truck unit. It also marks a tie-up with a subsidiary of its major competitor Toyota, which Volkswagen narrowly beat in becoming the world's biggest car maker by sales last year.
"It is true that there is fierce competition between our parent companies, but this alliance did not come out of the wishes of our parent companies," said Yoshio Shimo, chief executive of Hino Motors.
The cooperation will help Volkswagen Truck & Bus become a global champion in the transportation industry, said Andreas Renschler, chief executive of the Volkswagen unit.
Volkswagen Truck & Bus, which includes the MAN and Scania truck brands, and Tokyo-based Hino Motors plan to review possibilities for technological cooperation on conventional, hybrid and electric power, as well as connectivity and autonomous-driving systems.
The deal will help the two truck makers save money on research and development at a time when car makers are ramping up investments in electric vehicles and future technologies such as automated driving.
"Hino is a subsidiary of Toyota Motor Corp. and this relationship will not change going forward. But the commercial vehicle business is facing many issues, it would be difficult to solve them by staying only in the Toyota group," said Mr. Shimo.
Mr. Renschler said the technology of both partners could be used by both sides.
"We only have to spend money once, as opposed to twice or three times," Mr. Renschler said.
To discuss the long-term direction of the partnership, the companies have set up a joint "alliance board" that will include the chief executives of both Volkswagen Truck & Bus and Hino Motors as well as other senior management personnel.
Mr. Renschler said the board will meet every two months.
"There we push this kind of collaboration, which is our common target so we can get some speedy results," he said.
--Sean McLain in Tokyo contributed to this article.