Guangzhou Automobile Group and Toyota truck-making affiliate Hino Motors have established a new joint venture, Guangqi Hino Motors, to build and sell commercial vehicles.

The new JV follows the reorganisation of Guangzhou Yangcheng Automobile and Shenyang Shenfei Hino Automobile Manufacturing. Guangqi Hino willl continue to build Yangcheng Automobile's existing products at its present factory, and is constructing a new factory in Conghua, Guangzhou city, with plans to commence production in mid-2009.

Guangzhou Automobile Group directly or indirectly holds stakes in several companies - including Guangzhou Honda Automobile, Guangzhou Toyota Motor, Honda Automobile (China) and Guangqi Toyota Engine - and manufactures passenger vehicles, commercial vehicles, car engines and major automobile parts.

Hino is Toyota Group's commercial vehicle manufacturer after becoming a subsidiary in 2001.

Hino has exported about 1,500 heavy-duty trucks to China each year and the brand is known there for its durability, economy and reliability.

The Japanese news agency Kyodo News reported that the new JV is capitalised at JPY22.5bn and will be Hino's first truck production unit in China, though there is an existing joint venture for bus production.

Combined production and sales of large and small trucks for sale under the Hino brand are projected to reach 50,000 units a year in the future, up from an initially targeted 8,000, Kyodo added, noting that China has a rapidly growing truck market with annual sales of 1.75m units.