Toyota and Suzuki form capital alliance

Toyota and Suzuki have agreed to form a capital alliance to collaborate in new fields such as autonomous driving and electrification.

The two companies began considering a business partnership on October 12, 2016, and since then have continued to consider specific details.

On March 20 the companies announced a move towards joint product development and collaboration in production by bringing together Toyota’s electrification technologies and Suzuki’s compact vehicle technologies.

Now Toyota plans to acquire 24,000,000 shares in Suzuki (4.94% ownership) for 96 billion yen (NZ$1.4b or A$1.3b).

Likewise, Suzuki plans to acquire shares in Toyota equivalent to 48b yen (NZ$713 million or A$669m).

A reason for the partnership step up is that the automobile sector is 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, Toyota says.

“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 foundations.”

Share acquisitions in each other will be implemented after the companies obtain approvals from the foreign competition authorities.