Alliances between automakers is clearly en vogue now. The latest pairing includes Toyota and Suzuki, who have announced a capital alliance that will allow them to share certain technologies and components going forward.
The deal calls for Toyota $910 million to acquire a 4.94-percent stake in Suzuki. Subsequently, Suzuki will spend $452 million to snag about .2-percent of Toyota’s shares. This shared equity approach is going to serve as a foundation for a broader alliance between the two automakers.
In a joint statement the two Japanese automakers state the alliance is, “Intend(s) 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.”
The first fruits of this new alliance will be in the form of two new Suzuki hybrid models for the European market. These two models will be based on the RAV4 and Corolla Wagon hybrids. While this is the first product tie-up between the two, Suzuki and Toyota will be sharing far more.
Toyota is set to manufacture Suzuki engines, which it will utilize in some of its compact models. Toyota will also develop two new small cars for the Indian market based on the Suzuki Ciaz and Ertiga, while additional product tie-ups are expected for the African market.
Collaboration between the two automakers is also expected in the area of autonomous vehicle and electric vehicle development, the crux of most recent automaker alliances.
Speaking of alliances, this is not Toyota’s first. The company already owns holds a 16-percent stake in Subaru and a 5-percent stake in Mazda.