TOKYO -- Sterling commercial-truck dealers in North America will begin selling Fuso Canter trucks rebadged as Sterlings next June.
The sales will mark a key step in integrating Fuso into DaimlerChrysler's commercial vehicle business. They represent a concrete step toward realizing DaimlerChrysler Chairman Juergen Schrempp's vision of a united European, North American and Asian automaker -- at least in trucks.
"We are the Asian pillar of DaimlerChrysler commercial vehicles," says Harald Boelstler, CEO of Mitsubishi Fuso Truck & Bus Corp.
DaimlerChrysler owns 85 percent of Fuso. Members of the Mitsubishi Group own the rest. Attempts to join the Japanese truck company more closely with its German parent were delayed by a quality and recall scandal in Japan that rocked Fuso for more than a year.
Boelstler says Fuso is putting the scandal behind it. The last official filing of recall notices in Japan was in September. DaimlerChrysler now is ready to integrate Fuso more closely into its commercial vehicle division, he says.
In part, that reflects changes in Fuso's customers. As sales in Japan slid, the company continued to grow elsewhere. Today almost two-thirds of Fuso's sales are outside Japan. "We are thus changing from a more Japanese domestic manufacturer to a more international player," Boelstler says.
Fuso brings three assets to DaimlerChrysler, Boelstler says. It has a strong Asian presence, hybrid powertrain technology for trucks and a product lineup concentrated at the smaller end of the commercial-vehicle market. DaimlerChrysler's truck lineup is biased toward the larger end of the market.
Fuso's sales in Japan and in Asia-Pacific markets dwarf DaimlerChrysler's truck and bus sales there. It is particularly strong in Indonesia, Malaysia and Thailand. Fuso also far outsells DaimlerChrysler in the Mideast and Central Asia.
In North America, Fuso sells under its own brand through approximately 170 stores. DaimlerChrysler said several years ago that it wanted to expand Fuso's sales by offering the trucks through one of its own dealer networks. But it hadn't said which one.
Globally, DaimlerChrysler sells trucks and buses under the Freightliner, Sterling, Mercedes-Benz, Western Star, Thomas, Orion and Setra brands.
Tapping the Sterling brand and dealer network "opens up a totally new customer segment, without cannibalizing our Canter sales," Boelstler says.
There are about 275 Sterling dealers with roughly 340 stores in North America.
The Canter-based model will compete in the Class 3 to 5 range. "Sterling defined the product with some minor changes. They are intending to sell especially to their Sterling customers who want to have one brand" and service from one dealer, he says.
DaimlerChrysler is taking several other steps to integrate Fuso into its operations:
Keep the name
On the other hand, Boelstler says there are no plans to alter the current shareholding ratio or to drop the Fuso name. "We do not want to change our name. Mitsubishi has a very strong brand name, which is a very important asset, especially in Asia," he says.
Boelstler predicts Fuso will be in the black for the nine months ending Dec. 31. He says it is too early to predict results for 2006. But he expects good sales in Japan to aid profits.
Because of the recall scandal, several municipalities and other government units are barred from buying Fuso buses. Those purchase restrictions end at the end of this year. Boelstler predicts Fuso would win back much of that business.
But Fuso won't chase domestic market share. Boelstler says it won't because doing so would be expensive, and because Fuso is no longer a Japan-centric truck company.
"The future of Fuso," he says, "is really more and more dependent on our market success outside of Japan."
You may e-mail James B. Treece at [email protected]