Published on August 30th, 2019 | by Daniel Sherman Fernandez


Toyota and Suzuki on Wednesday announced ‘capital alliance’

Toyota and Suzuki have announced an agreement built around a capital alliance as the two firms look to “establish and promote a long-term partnership”.

Apart from manufacturing electric and hybrid models, both companies will jointly develop autonomous driving technology.

The news is the latest in a string of joint announcements that kicked off when the two Japanese automakers signed a memorandum of understanding back in February 2017.

But this latest agreement will see the automakers acquire shares in each other. So, Toyota plans to acquire 24,000,000 shares of common stock in Suzuki (that’s 4,94 percent of the total number of shares issued by Suzuki as of March 31, 2019, excluding treasury shares) with a total value of ¥96-billion by underwriting the disposition of treasury shares by way of third-party allotment conducted by Suzuki.

Likewise, Suzuki plans to acquire, through purchase in the market, shares in Toyota equivalent to ¥48-billion. These share acquisitions, say the firms, will be implemented after the companies obtain “approvals from the foreign competition authorities”.

“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 joint statement said.

“The two companies intend to achieve sustainable growth, by overcoming new challenges surrounding the automobile sector by building and deepening co-operative relationships in new fields while continuing to be competitors, in addition to strengthening the technologies and products in which each company specializes and their existing business foundations.”

Both companies are also developing a C-segment SUV for the Indian market. Toyota has also started exporting some of Suzuki’s products to African markets.

Toyota President Akio Toyoda said

“When it comes to vehicle electrification, which is expected to make further inroads, hybrid technologies are seen as playing a huge role in many markets, as from before. Widespread acceptance is necessary for electrified vehicles to be able to contribute to Earth’s environment. Through our new agreement, we look forward to the wider use of hybrid technologies, not only in India and Europe, but around the world. At the same time, we believe that the expansion of our business partnership with Suzuki―from the mutual supply of vehicles and powertrains to the domains of development and production―will help give us the competitive edge we will need to survive this once-in-a-century period of profound transformation. We intend to strengthen the competitiveness of both our companies by applying our strong points and learning from each other.”

Suzuki Chairman Osamu Suzuki said

“At the time we announced our scope of cooperation in May last year, I spoke that we will strive for success globally. I have seen progress in the partnership since then, and it is my pleasure to be able to make this announcement today regarding the status of partnership on a global basis, including Europe and Africa. In addition, we appreciate the kind offer from Toyota to let us make use of their hybrid technology. We will continue our utmost efforts.”

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