Japanese auto giants Toyota and Suzuki on Wednesday announced entering into an agreement under which the firms will buy stakes in each other to promote a long-term partnership for collaboration in new fields, including autonomous driving.
Under the pact, Toyota will acquire 2.4 crore shares, or a 4.96% stake, in Suzuki valued at ¥96 billion, while Suzuki will buy shares worth ¥48 billion in Toyota.
Business partnership
The automakers had first announced a business partnership in October 2016. In March, this year, they agreed to jointly develop products, collaborate in production and promote mutual supply of products by bringing together Toyota’s strength in electrification technologies and Suzuki’s strength in technologies for compact vehicles.
Explaining the purpose of the alliance, the two firms said in a statement, “... 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.”
Sustainable growth
The 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,” the statement added.
“Specifically, to take up challenges together in this transitional era, the two companies plan to establish and promote a long-term partnership between the two companies for promoting collaboration in new fields, including the field of autonomous driving,” the statement said.
The communique added that the execution of the capital alliance agreement was a confirmation and expression of the outcome of ‘sincere and careful discussions’ between the two automobile companies, and will serve to build and promot their future partnership in new fields.
