Mitsubishi Fuso And Hino Motors Integration – CEO Karl Deppen's Views On The Future Of The Trucking Giant

Forbes

4 days ago

The global trucking industry is a tight knit, closed industry so when news of a merger between Mitsubishi Fuso and Toyota's Hino Motors first surfaced, I knew I had to hear the reasons behind the merger myself and, more importantly, understand the focus and potential of the new entity. I recently had some time to speak in person with Karl Deppen, the president and CEO of Mitsubishi Fuso, and asked him about this significant step for both companies and his vision of the future of trucking industry and the new entity. Karl's views are clear, concise, and demonstrate a deep understanding of the truck and bus market. We discussed in detail some of the game-changing technologies present today and how they could influence one of the world's largest truck and bus manufacturers, as well as the future of the new organization. You can read the full interview transcript on the MarketsandMarkets site under the Future of Mobility section.
If there's one word I could take away from this interview, it would be loyalty. Karl Deppen is very clear on what comes first: customers. Sure, other things matter, but according to Karl, not at the expense of customers. That is something I deeply resonate with. Many companies start out being very customer-focused but somehow lose their way. Ultimately, providing customers with what they want will make you successful, even if that's not what you initially expected. Karl emphasizes that the merger will not impact individual products and will allow both companies to maintain their own branding instead of creating something new that might alienate customers.
The Perfect Storm: Megatrends Driving Change
There's been rapid progress in technology over the past decade. While the world has mainly used AI to solve minor problems and boost productivity, some fields —like cloud computing, quantum computing, and Generative AI —have quietly reached levels that seemed impossible a few years ago. Global advancements have also shifted, moving from decarbonization and climate change to AI and ML. Karl believes that besides AI, other trends are also important, and maintaining a good balance is crucial. He sees decarbonization and AI as the two key megatrends that will shape the future of the automotive industry, even connecting decarbonization to the huge energy needs of GenAI. According to Deppen, the future will focus on renewable energy as more manufacturers shift away from fossil fuels, and decarbonizing the auto industry will give it a clear advantage. Fuso is already working on this—decarbonizing powertrains for on-road transportation.
Deppen also encourages manufacturers to make even more ambitious use of the digital tools available today, which is a big ask when you stop to look at the gadgets and technology available in today's vehicles. However, he stresses that the same technology is accessible to customers, raising their expectations and prompting changes in both their environment and the environment of their customers. From same-day delivery, something we have grown accustomed to, to on-demand availability, customer preferences are shifting, requiring changes in transportation options as well. And Deppen wants Fuso to be part of the solution. As he likes to say, 'Modern society needs modern transportation.'
Deppen also foresees a significant change in public transportation or mobility. He says that increasing urbanization will lead to more densely packed cities, requiring better transport options. He believes that BRT, or Bus Rapid Transit systems, will reemerge as a solution for public mobility, alongside other options like subways, buses, and shuttle services. Despite advances in digital tools and on-demand services, Deppen emphasizes that transportation is a vital part of modern life, and people want to travel—whether to meet friends, visit the hospital, or contact local authorities to resolve issues—and this need must be met and optimized just as freight transportation has been optimized. He also discussed interesting ideas such as Japan's aging population—which might require more flexible on demand transportation solutions instead of rigid schedules—and the importance of organized public transit in densely populated urban areas to reduce individual car use and improve traffic flow.
The Future of Fuso and Hino: Birth of a New Entity
While we're not exactly sure what the holding company emerging from the Fuso-Hino integration will be called, Deppen expects the identities of both brands to stay the same. He says the merger will have to address decarbonizing, efficient transportation, software-based architectures for products, and, of course, changing customer needs. He's also aware that different countries in Asia, South Africa, and South America might not be able to switch to electric mobility overnight. For customers in these regions, maintaining and sometimes even improving current products will be very important. Deppen also mentions scale—Mitsubishi Fuso, as part of Daimler Truck, has good scale on the heavy-duty side and a unique product portfolio in Asia on the light-duty side, but he thinks they will need to build scale for future tech investments. While he knows the Japanese market is consolidating—with this merger, they'll be down to two main competitors—he's also very aware that the market has shrunk to a fraction of what it was thirty years ago—one of the key challenges the Fuso-Hino merger must face to stay successful. Add the challenge of Chinese competitors, who focus on low costs, high capacity, and aggressive pricing, and it's clear that Karl Deppen has a lot on his plate. However, he believes the merger can handle all this and more, while benefiting both companies, saying, 'We created the trust in the discussion with each other, and now we have finally made it to an agreement that we will integrate the two companies and bundle our strengths. Both companies are strong, enjoy strong brands, so this is why we said we need to do it now, before we engage in the future investment cycle, to tap the full benefit.'
Dual-band Strategy: Strength in Diversity
Deppen is convinced that the strength of both companies will overcome these challenges by offering better solutions for customers and helping them succeed in their businesses. And I dare say he's right—the company not only has state-of-the-art products at competitive prices along with future-oriented drivetrain technologies with all-electric eCanters offered in over 35 countries, but is also seeking to promote hydrogen-based technologies for heavy-duty trucks in regions where battery electric mobility may be difficult to establish, like Asia. Deppen firmly believes that the Fuso-Hino merger can provide customers with better products and support them with the entire ecosystem, from charging, financing, leasing, and vehicle maintenance solutions to working with municipalities on grid connections. He feels that supporting customers is very important, especially during the shift from diesel to zero-emission drivetrains. Under Deppen, Mitsubishi Fuso offers customers full service and lease packages for up to 8 years, believing that customer peace of mind is essential. He says, 'You switch to battery electric, don't worry. You can have certainty and confidence in the product because we do have confidence in the product. You can have peace of mind with operations.'
And while Deppen is unsure if all of this can be integrated into one offering, he believes the merger can help scale with broader leverage thanks to Hino's and Fuso's complementary product mix and regional outlook. Once merged, the company will also explore innovative idea like battery swapping. As always, Deppen aims to solve customer problems and openly acknowledges that some users might need extra range without sacrificing payload. He believes battery swapping could make a lot of sense for these customers and is willing to push the boundaries to assist them. He does not see battery swapping as a competing solution but as a complementary one. Under Deppen, Fuso completed the proof of concept for battery swapping (last year in Kyoto) and plans to start the pilot in Tokyo on a larger scale this year.
Deppen's opinion on Chinese offerings is also distinctive. He believes that battery technology is largely similar due to the limited number of battery suppliers and modestly states that the best state-of-the-art batteries originate from Asia or Asian suppliers, specifically Korea and China. He does, however, acknowledge that the Chinese benefit from large scale, competitive costs, and rapid modification and development. Nevertheless, he points out that trucks are quite different from cars, requiring a strong service and support network as well as reliable infrastructure for service, parts, support, advice, and vehicle mechanics—areas where Fuso is particularly strong.
Mitsubishi Fuso has long been a key player in Europe. In fact, their Portugal assembly plant has been operating for over 40 years, holding a strong position in the European light-duty truck market. Over time, they've managed to transfer some of that respectability to the electric truck sector as well, becoming a trusted name for electric light-duty vehicles in the industry. Besides the European market, Fuso also has a solid presence in the Middle East and South America. Meanwhile, Toyota's Hino is a major player in the US market and has a significant presence in parts of New Zealand and Australia. Both companies have Japanese roots but serve customers worldwide, adapting to the different vehicle sizes and regulations across Asia and Europe. In the US, heavy-duty and long-haul segments dominate, whereas the transportation structure in Asia varies greatly. This allows both companies to serve many versatile markets, a strength few can match. Deppen aims to elevate this further and make the brand a household name worldwide. And he has the pedigree to do so—he's lived and worked in several countries, experiencing various cultures, environments, and business challenges. He has extensive experience with trucks as well as passenger cars, which he shares openly with his teams. His mantra to success is simple: listen to what people, including customers, have to say before making decisions, and avoid the common mistake of finding solutions before understanding the problem. Deppen emphasizes the importance of engaging and communicating with people, while also giving them the freedom to operate and progress. He says, 'I think people need freedom to operate to get things done—this is how the organization can create speed, how the organization can create commitment and also determination to get things done.'
Karl Deppen loves everything with wheels, which I believe has helped him succeed. He enjoys reading in his free time (although he has not read my last book Innovating to Zero yet) and exploring different industries, problems, and how others handle those challenges, believing he can learn a lot from them. On a positive note, he emphasizes that the merger won't lead to downsizing; instead, the new company plans to hire the right talent to stay competitive, giving more people the chance to be part of the journey. I wish Karl Deppen all the best in the future. And of course, to take the time to read my book.