Toyota and Suzuki confirm details of new 'Alliance'

Suzuki/Toyota compact SUV render - front Each plans to acquire the shares of the other, but remain competitors to achieve sustainable growth

Toyota and Suzuki have announced plans to acquire a stake in another operation as part of the transition to a joint development program.

Toyota plans to take a 4.94% stake in Suzuki at a cost of £743.3m for 24m shares of common stock. Suzuki, meanwhile, will invest around £372m in Toyota. The deal is awaiting approval from foreign competition authorities.

The difference in investment amounts reflects the inflated value of Toyota; in 2018, the company became the first Japanese firm to achieve annual sales of 30 trillion. yen (£232bn), while Suzuki reached about one tenth, down 3,871.5bn yen (£28bn).

The statement from Toyota reads: "The two companies intend to achieve sustainable economic growth, overcome the new challenges surrounding the automotive sector by developing and deepening cooperation in new areas, continuing to be competitors, in addition to strengthening the technologies and products in which each company specializes and their existing business backbone.

"Specially to meet the challenges together in this transitional era, the two companies plan to develop and pursue a long-term partnership between themselves, to develop cooperation in new areas, including in the field of autonomous driving."

In March, the two companies announced the first details of a new wide-ranging collaboration that will include Toyota producing Suzuki-badged hybrid vehicles based on the Rav4 and the Corolla station wagon for the European market. The deal will include Suzuki funds being built at the Toyota Derbyshire plant.

The two Japanese companies signed a memorandum of understanding to develop partnerships in 2017, and have now agreed on the specific details of the deal. The two companies say the agreement will combine "Toyota's strength in electrification technology and Suzuki's strength in compact car technology."

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The agreement is also intended to help both companies "grow in new fields" and will include joint cooperation in manufacturing and electrified vehicles. Toyota and Suzuki say they will "continue to compete fairly and freely with each other."

Both companies gave details on a number of specific projects in which they will cooperate, divided into three strands.

Toyota will supply its hybrid powertrain system to Suzuki globally, and will also supply Suzuki with two new RAV4-based electrified vehicles and a Corolla station wagon for the European market. The two new models, both on sale in late 2020, will be additions to Suzuki's current range and not replacements for an existing model.

Based on the Corolla, the car will be built at Toyota's Burnaston plant in Derbyshire alongside the new Corolla, with production starting in late 2020. Hybrid powertrains will be produced at the Deeside Engine Plant. The addition of a new model is not expected to add to the 3200 people employed at the two sites.

Toyota has invested more than £2,75bn in the UK operation, and the firm's head of UK manufacturing, Marvin Cook, says the move "demonstrates Toyota's trust in our employees' ability to deliver highler levels of top quality products".

He added: "Aiming to produce additional volumes for other manufacturers is one example of all the efforts we are putting in to keep our CC of manufacturing operations as low as they can be."

Toyota will also be taking Suzuki's newly developed compact car engines to the European market. These engines will be produced at the Toyota Center in Poland. Toyota said it was too early to determine which models would get you engines.

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The two firms will develop hybrid vehicles for the Indian market. Suzuki will also supply Toyota with two compact vehicles based on the Ciaz and Ertiga for the Indian market, and four vehicles for the African market. In addition, Toyota and Suzuki have agreed to collaborate to develop a C-segment hatchback for India, with Toyota taking over production of the Suzuki Vitara Brezza in that market.

Toyota boss Akio Toyoda said: “We believe that the expansion of the business partnership with Suzuki, from the mutual supply of vehicles and powertrains to development and production, will help give us a competitive advantage, we must experience this once in a century period of profound transformation.”

Suzuki boss Osamu Suzuki added: “We greatly appreciate the generous offer from Toyota to allow us to use their hybrid technology.”


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