Toyota and Suzuki buy stakes

Andrew Cummings
September 1, 2019

While the two firms maintain that they will continue to remain competitors, experts feel Toyota's growing clout in Suzuki will impact the latter's decision-making, which can further have an impact on Suzuki's largest market - India.

Toyota Motor Corp. and Suzuki Motor Corp. are strengthening their relationship by taking stakes in one another, the latest alliance in an industry that's facing sweeping changes in technology, consumer preferences and business models.

As per the sources, Toyota will purchase a 4.94% stake in Suzuki for 96 billion yen, while Suzuki will buy shares worth 48 billion in Toyota.

The idea of a partnership became a consideration back in October 12, 2016, and has continued to be developed since.

The partnership has already yielded its first results with the rebadged Baleno called the Toyota Glanza. Tocqueville Asset Management L.P. now owns 11,900 shares of the company's stock valued at $1,475,000 after acquiring an additional 200 shares during the period.

The automotive sector is going through a never-before turning point with new regulations and new entries into the automobile market. There are new technological challenges in the automobile industry with the need for a consolidated system to meet these challenges. The institutional investor owned 4,558 shares of the company's stock after selling 269 shares during the period.

In a statement on their capital alliance agreement, Toyota and Suzuki said: "The automobile sector is now 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".

Working together will help strengthen tech, products, company specializations, and existing business foundations.

By teaming up, they will tackle "this transitional era" to promote tie-ups in new fields like autonomous vehicles. Now, it seems that the Japanese carmakers look to solidify their long-term partnership as they enter into a capital alliance agreement. Suzuki will also supply the Ciaz, Vitara Brezza and Ertiga to Toyota for India and these vehicles will roll out from the Toyota plant by 2022.

Suzuki's shares were up 1.3%, to 4,136 yen, in morning trading in Tokyo on August 29 while Toyota's dipped slightly, to 6,880 yen. Share acquisitions will be implemented once both companies obtain approvals from foreign competition authorities. And, in order to take bigger and better steps on the path of development, Toyota has struck a technical partnership with Suzuki.

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