With Rolf Eckrodt set to become CEO of Mitsubishi Motors in June, cooperation in commercial vehicles between DaimlerChrysler and the Japanese carmaker is poised to get going.
That's because Eckrodt, who turns 60 in June, joined Mitsubishi from DaimlerChrysler in January 2001 as chief operating officer of car operations only. Both he and Takashi Usami, chief operating officer for truck operations, reported to President Takashi Sonobe, who will become chairman in June.
But as CEO, Eckrodt will oversee both light vehicles and commercial trucks, bringing a unified corporate view to any cooperative talks with DaimlerChrysler.
Mitsubishi and DaimlerChrysler, which owns 37.3 percent of Mitsubishi, are still 'exploring possibilities and opportunities' in trucks, Sonobe said last month.
There is a chance that Mitsubishi would spin off its truck operations. It could sell a minority stake in a new company to the public to raise cash, although analysts don't expect it soon.
The potential for combining worldwide truck operations always was a major reason for DaimlerChrysler's interest in Mitsubishi, analysts said.
'One of the main strategic reasons for taking a stake in Mitsubishi was trucks,' said Koji Endo, director of equity research at Credit Suisse First Boston Securities in Tokyo.
Analysts expect the two companies to cooperate first in shared distribution in Europe, North America and Southeast Asia, and later in expanding operations in China. There are also opportunities in technology sharing, particularly on emissions controls, and parts sharing.
But finding ways for the two truck operations to cooperate won't be easy because of the difference in their size and product lines. DaimlerChrysler, with unit sales of 492,900 in 2001, is the world's biggest maker of heavy-duty trucks and buses. It sells under the Freightliner and Mercedes-Benz brands.
Mitsubishi Fuso Truck and Bus estimates that its sales in the fiscal year ending March 31, 2002, excluding minitrucks, at 142,000 units. In medium- and heavy-duty trucks, it was No. 2 in Japan with a market share of about 28.9 percent, slightly behind Hino Motors.
Both makers produce a full line of trucks, but Freightliner and Mercedes brands specialize in larger trucks. Mitsubishi's strength is cab-over, small- to medium-sized urban delivery trucks.
'In the light-truck segments, Mitsubishi products are very suited to the Japanese market and Asian market - which we don't have,' said Rainer Jahn, the outgoing head of DaimlerChrysler Japan Holding. 'Here, we can see real potential if we make use of what they have.'
Both DaimlerChrysler and Mitsubishi are eager to find cost savings because each is restructuring truck operations.
DaimlerChrysler is trying to fix a mess at its Freightliner unit in North America. Trucks last year accounted for about 40 percent of Daimler-Chrysler's unadjusted operating loss of $1.17 billion (E1.31 billion).
Over the past two years Fuso has closed several components plants, consolidated five assembly lines into four, and reduced its work force by 14 percent. In the fiscal year ended March 31, 2001, Mitsubishi's only profitable operations were trucks and North America.
In the fiscal year that ended in March 2002, trucks again were profitable, while Mitsubishi as a whole is projected to be at break even. But nobody is expecting a rapid upturn in Mitsubishi's truck performance.
A weak overall truck market in Japan - where sales are stuck at levels last seen in the early 1960s - continues to hamper Mitsubishi Fuso's performance. Endo estimates the weak Japanese truck sector could last another three or four years.
William Nestuk, auto analyst for WestLB Securities Pacific in Tokyo, says any short-term savings must come from shared distribution.
'In the long term, they can save by consolidating platforms and developing combined products,' he said.
Already, the Fuso Canter delivery truck built in Portugal (see story, Page 12) is sold at Mercedes truck dealerships in the UK, France, Italy, Sweden and Poland - all markets where Mitsubishi had no dealers before the DaimlerChrysler alliance.
The two companies are looking for similar arrangements elsewhere.