Toyota and Suzuki agree to equity stake deal to promote long-term partnership

Japanese automakers Toyota Motor Corporation and Suzuki Motor Corporation will take a small equity stake in each other’s company, in order to establish and promote their long-term partnership and collaboration in new fields, including in the field of autonomous driving. 

Toyota will pay around JPY96 billion (USD903 million) for a 4.94% stake in Suzuki, while Suzuki will acquire in the market around JPY48 billion (USD451 million) worth of shares in Toyota. That is equivalent to 0.2% of Toyota’s shares as of Wednesday’s closing price, before the announcement.

The two companies began discussions in October 2016, and in March this year, they announced that they would start considering options to engage in joint product development and collaboration in production, in addition to promoting the mutual supply of products, by bringing together Toyota’s strength in electrification technologies and Suzuki’s strength in technologies for compact vehicles.

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 specializes and its existing business foundations.

The execution of the “capital alliance agreement” is a confirmation and expression of the outcome of sincere and careful discussions between the two companies, and it will serve for building and promoting their future partnership in new fields,” Toyota said in a statement.

These share acquisitions will be implemented after the companies obtain approvals from the foreign competition authorities.