Toyota and Suzuki have now entered a Capital Alliance Agreement. The development fosters and promotes the long-term partnership between both companies. Both partners will collaborate in new fields, including autonomous driving.
The business partnership between both companies has been developing over time. The idea of a partnership became a consideration back in October 12, 2016, and has continued to be developed since.
In March 20, 2019, Toyota and Suzuki announced that they would begin specific considerations. This would lay the groundwork to engage in joint product development and production collaboration. Both partners are keen on promoting mutual supply of products. This will come to fruition by making best use of Toyota’s electrification tech, and Suzuki’s compact vehicle tech.
With the industry bracing for changes, both partners look forward to overcoming new challenges. The auto industry is embracing great changes pertaining to enhanced environmental regulations, and competition from new entries from distinct industries and diversified mobility businesses. Toyota and Suzuki intend to achieve sustainable growth by building and deepening cooperative relationships in new fields, even as they continue to remain competitors.
Working together will help strengthen tech, products, company specializations, and existing business foundations. Both companies together will approach current day transitional era challenges.
Establishing a long-term partnership to collaborate in new fields includes the premise of autonomous driving. The announcement of the capital alliance agreement is an outcome of discussions between both companies regarding how they plan the future of the partnership pertaining to new fields.
To develop and promote a long-term partnership between both companies, Toyota and Suzuki intend to acquire each other’s shares, basis the ‘Alliance’. Toyota plans to acquire 24,000,000 shares of common stock in Suzuki (4.94 percent 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.
Similarly, Suzuki plans to acquire, through purchase in the market, shares in Toyota equivalent to JPY 48 billion (half the amount which was paid by Toyota). Share acquisitions will be implemented once both companies obtain approvals from foreign competition authorities.
Toyota has started exported made in India Maruti Suzuki cars like the Alto, Swift and Ciaz to markets in Africa. Toyota is selling Suzuki cars at their dealerships in Africa, as Suzuki has no presence in those countries. In India, Toyota recently launched a rebadged Suzuki Baleno, and called it Glanza. Similarly, Toyota has plans to launch rebadged Vitara Brezza, Ertiga and Ciaz in India next.