Dive Brief:
- Truck and engine manufacturer Hino Motors is closing its factory in Marion, Arkansas, as part of its plan to withdraw from the auto parts business, the company announced late last month.
- The Japan-based company will lay off 1,300 workers over the next three years amid the closure of its largest U.S. site.
- The company is cutting spending after its operational costs rose in fiscal year 2024 due to “skyrocketing prices of materials,” the company said in an April 25 earnings release.
Dive Insight:
Hino is evaluating the impact costs of shuttering the facility and withdrawing from the auto parts business, according to the statement.
The company noted in its closure announcement that "recovering sustainable profitability is difficult," in the auto parts business, pushing it to withdraw from the segment. The company's auto parts operating profit was down 29.5 billion yen in fiscal year 2024, which ended March 31.
SUV and light-duty truck sales for Hino’s parent company, Toyota Motor Corp., decreased to approximately 104,300 units, down 18.4% from last fiscal year’s 127,900 units.
The truck and auto part maker is looking at ways to cut costs as a result of the losses, as well as improve productivity and competitiveness, Hino said in the earnings report.
Hino’s Marion facility produces rear axles, knuckles and suspension components for Toyota’s Tundra and Sequoia models, according to the company’s website. The Hino plant also makes side rails and engine rods for its medium-duty trucks and diesel engines.
While the company is working to cut costs, it’s also in the midst of a merger with fellow Japan-based truck manufacturer Mitsubishi Fuso Truck and Bus Corp. The two companies will combine “on equal footing,” with parent companies Daimler Truck and Toyota Motor also equally invested in the deal, which is still pending approval, according to a February 2024 announcement.
