Scania and Japanese commercial vehicle manufacturer Hino Motors Ltd. today entered a strategic co-operation agreement. The aim of this agreement is to establish a long-term business alliance in order to increase the market potential for both companies.

The alliance is not based on any cross ownership between Hino and Scania.

A deal will allow the two firms to share the high and rising costs of developing environmentally friendly powertrain technology and fill out their respective product line-ups. Hino will likely supply medium-duty trucks and engines to Scania, the latter providing Hino with heavy-duty product.

Hino is 50% owned by Toyota and is Japan's largest manufacturer of commercial vehicles.

Hino and Scania are complementary from a product and geographical point of view.

Scania said in a statement that as a result of the business alliance, 'both companies will gradually increase revenue and profit, enhance the competitiveness of their products and reduce costs'.

The statement added: 'Another benefit is increased leverage from combined know-how in emission control, with the purpose of further reducing the environmental impact of diesel engines.'

A number of cooperation areas have been identified, and feasibility studies initiated. Scania and Hino will now focus on developing the alliance and making priorities. One of the first steps is a pilot introduction of Scania tractor units, which will be marketed by Hino on the Japanese market.

A joint evaluation will also commence of the potential use of Hino's 7/8-litre engine in some Scania vehicles.