Japanese automotive manufacturers, Toyota Motor Corporation and Suzuki Motor Corporation have announced that they would be acquiring stakes in each other via a capital alliance agreement in a bid to solidify their positions. This move is coming on the heels of rapid forward shifts toward electrified and self-driving cars in the auto industry.
This bold move will allow Toyota to acquire about 5 percent of Suzuki shares for about ¥96 billion ($907 million), while Suzuki will get a portion valued at about ¥48 billion in Toyota.
It will be recalled that on October 12, 2016, the two companies had first announced their business partnership. In March this year, they agreed to engage in joint product development and collaboration in production, in addition to promoting mutual supply of products by bringing together Toyota’s strength in electrification technologies and Suzuki’s strength in technologies for compact vehicle.
In a joint statement, Toyota and Suzuki said that the automobile sector is currently experiencing a turning point unprecedented in both scope and scale, not only because of enhanced environmental regulations but also from new entries from distinct industries and diversified mobility businesses.
“The two companies intend to achieve sustainable growth by overcoming new challenges surrounding the automobile sector by building and deepening cooperative relationships in new fields while continuing to be competitors, in addition to strengthening the technologies and products in which each company specialises and their existing business foundation,” they said.
As part of their earlier agreement, Toyota and Suzuki are already developing a C-segment sport utility vehicle for the Indian market. Suzuki has begun to supply its India-produced vehicles — Baleno, Alto, Swift, Vitara Brezza, Ciaz, Ertiga — to Toyota for the African market.
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