Hino says mulling ties with Scania in S Korea

TOKYO, Sept 13 (Reuters) Truck maker Hino Motors Ltd. said on Wednesday it is considering tying up with Swedish peer Scania in the South Korean market, helping lift shares in the Japanese company.

Hino Motors spokesman Junichi Yoshida said South Korea may be a good candidate country for a tie-up as it is close to Japan, which is convenient for product shipping, while Scania is already an established brand name there with its large trucks.

Yoshida added that the two companies had not reached any final decisions on a tie-up yet.

Shares in Hino Motors, the truck-making unit of Toyota Motor Corp., were up 2.02 percent to 656 yen by the midday break in Tokyo after a report on the company's plans with Scania. The benchmark Nikkei average was up 1.06 percent.

As a first step, the Swedish truck maker will start sales of four-ton-class midrange Hino trucks in South Korea next April through its local dealership network, the Nihon Keizai business daily reported on Wednesday.

It would be the first full-fledged entry of a Japanese brand truck into the country, the paper said.

It added that Hino Motors is planning further ties with Scania to expand sales channels in Asia and South America in the face of growing competition from market leader DaimlerChrysler AG But Yoshida said his company was not considering ties with Scania elsewhere at this time.

Hino Motors aims to have a 10 percent share in South Korea within two to three years, the paper said. In 2005, South Korea's truck market reached more than 210,000 units, of which about 10,000 were medium-duty.

Hino Motors said it first established a partnership with Scania in 2002 to exchange engineers. In 2003, it started sales of Scania trucks in Japan, but the alliance is still limited to the Japanese market.

REUTERS VJ PM0805