Nozomu Harada
President and Director General
Hino Motors
/
Insight

Segment Sophistication Can Trump Price

Sat, 09/01/2018 - 12:38

While car buyers focus on the status, comfort and image a vehicle provides, truck owners pay more attention to durability, performance and resale value when shopping for units. Nozomu Harada, President and Director General of Hino Motor Sales México, says that focusing on these traits is the key to a successful commercial vehicle offering.
“Owner-operators and transportation companies are professional customers that need professional equipment,” says Harada. Despite the challenge of low heavy and commercial vehicles sales, Hino sees an opportunity as the Mexican truck and commercial vehicle market becomes more sophisticated.
The Japan-based commercial and heavy-vehicle brand that is part of the Toyota Motor Corporation holds a 50-percent market share in its home country. Its participation is also strong in Asian markets such as Thailand, with 45 percent, and Indonesia, with 60 percent. In North America, the company has achieved a market share of 40 percent in Canada and 15 percent in the US but it still holds less than 5 percent in Mexico. “Mexico offers a strong opportunity for growth as the segment becomes more professionalized,” says Harada.
Hino’s small share in Mexico, however, has also been an advantage, helping it weather a period of slack sales. “Market deceleration does not affect Hino,” explains Harada. “Having a market share under 5 percent protects us from any fluctuation.” This does not mean that the company has no growth expectations. Prior to 2018, Hino reached yearly growth rates of 20 percent and Harada expects the company to grow 8 percent by the end of the year and 10 percent by 2020. “We want to sell between 3,300 and 3,600 trucks in 2018,” he says. The company already has 25 3s (sales, spare parts, service) centers in Mexico and 47 service-only points where trucks receive maintenance. According to Harada, the company wants to add 10 3s centers to its network for a total of 35 in 2018. “In 2018, Hino will reach 100 service points,” he says.
Hino is betting on the sophistication of Mexican clients in the transportation segment to drive its growth. “Our focus is on constantly improving the quality of our vehicles and on deepening customer satisfaction through aftersales,” says Harada. The company built its strategy on aftersales capabilities prior to boosting its sales. Harada thinks that delivering good service through well-qualified mechanics and ensuring product quality will secure loyalty from Hino customers and attract a larger customer base. “It is quality rather than price that drives this cycle,” says Harada. “Clients in Hino’s target segments want to receive quality service at our shops once they have purchased a unit.”
The company plans to make truck operations in Mexico safer by adding more safety and comfort-related equipment, such as air conditioning, airbags and ABS brakes to minimize damage. Additionally, Hino plans to include more pro-active safety equipment such as automatic brakes, fatigue sensors and lane-changing alarms to prevent traffic accidents.
Hino is also delving into eco-friendly motorizations to reach businesses that have established an environmental awareness and which look for greater fuel efficiency. “The hybrid version of the 300 Series has attracted the attention of businesspeople interested in protecting the environment and taking care of their corporate image,” says Harada.Although hybrids have been Hino’s priority in Mexico, Harada says the company could bring some of its CNG, fuel cell and electric trucks as well as more hybrid motorizations to the country. This, however, will depend on how ready the market is to receive them. “Mexico needs more gas and charging stations for Hino to offer these options and inflation rates will impact what products we choose to bring,” he says.