Strengthening their existing collaboration to develop futuristic technologies, Japanese vehicle manufacturers Toyota Motor Co and Suzuki Motor Co on Wednesday announced ‘capital alliance’ for equity investment in each other. While Toyota will purchase 4.94% shares of Suzuki Motor Co worth 96 billion Japanese yen, the latter will buy shares worth 48 billion yen in the former.
Toyota plans to acquire 24,000,000 shares of common stock in Suzuki (4.94% ownership of the total number of shares issued by Suzuki as of March 31, 2019, excluding treasury shares, with a total value of JPY 96 billion) by underwriting the disposition of treasury shares by way of third-party allotment conducted by Suzuki, according to a press release issued by both companies.
Apart from manufacturing electric and hybrid models, both companies will jointly develop autonomous driving technology.
“The two companies plan to establish and promote a long-term partnership for promoting collaboration in new fields, including the field of autonomous driving. 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,” the release said.
Toyota and Suzuki first came together to develop affordable hybrid and electric vehicles for the Indian market. Toyota will also supply the hybrid technology to Suzuki for the Indian market and abroad as part of the collaboration.
Subsequently, the companies got into an arrangement wherein they will sell each other’s existing products in the Indian market and abroad. Toyota will set Suzuki’s Baleno hatchback and compact sport utility vehicle Vitara Brezza, while the latter will sell the Corolla sedan.
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.
This article was first published on livemint.com
