Toyota, Suzuki Announce Capital Alliance
Nagoya, Aug. 28 (Jiji Press)--Toyota Motor Corp. <7203> and Suzuki Motor Corp. <7269> on Wednesday announced a capital partnership with the aim of accelerating the development of autonomous driving and other next-generation mobility technologies.
Toyota, the leading Japanese automaker, will take a 4.94 pct stake, worth 96 billion yen, in the smaller domestic peer, while Suzuki is set to obtain a Toyota stake of about 0.2 pct, worth 48 billion yen.
The capital alliance builds on the two companies' business tie-up accord announced in February 2017. They have so far collaborated in such fields as hybrid vehicles, as well as in Indian automobile market, where Suzuki has a large presence.
In terms of capital, the Japanese automobile sector will be consolidated into three camps--the Toyota-led group, the alliance of Nissan Motor Co. <7201> and Mitsubishi Motors Corp. <7211>, and Honda Motor Co. <7267>.
In their respective statements, Toyota and Suzuki said that they agreed on the capital tie-up "in order to establish and promote a long-term partnership" for facilitating their collaboration in new fields, including autonomous driving.
The move comes at a time when U.S. information technology giants and Chinese companies are vigorously conducting research and development on cutting-edge mobility technologies by spending heavily and using artificial intelligence.
Toyota and Suzuki concluded that they need to respond to issues involving the auto industry by further deepening their relations.
Among domestic and overseas rivals, Germany's Volkswagen AG and Ford Motor Co. of the United States agreed in July to join hands in electric vehicles and self-driving technologies.
In October last year, Honda and U.S. giant General Motors tied up to develop autonomous driving technologies.
Toyota, which has been speeding up technological development, spent 1,048.8 billion yen on R&D activities in fiscal 2018, which ended in March this year, up from 910.5 billion yen in fiscal 2013. It has set aside 1.1 trillion yen in R&D funds for fiscal 2019.
Meanwhile, fiscal 2019 R&D spending at Suzuki, a laggard in the area of autonomous driving, is seen totaling 170 billion yen, less than a sixth of the amount at Toyota. "Suzuki can't survive rapid changes now occurring in the automotive industry on its own," a source related to the company has said.
Toyota has so far made Daihatsu Motor Co. a fully-owned subsidiary. It has a stake of 50.2 in Hino Motors Ltd., 16.8 pct in Subaru Corp. <7270> and 5.1 pct in Mazda Motor Corp. <7261>.
[Copyright The Jiji Press, Ltd.]