Suzuki from Toyota brothers forever

Japanese automakers Toyota Motor and Suzuki Motor announced the formation of a long-term alliance, which will accelerate their technological development and help adapt to radical changes in the world automotive industry.

Companies will form a partnership by purchasing each other’s shares. Toyota will buy 4.94% of Suzuki shares worth $ 907 million, and Suzuki will acquire $ 453 million more large Toyota, which is equivalent to a share of 0.2% at the current rate. Suzuki uses the funds received to develop new technologies, including robotic driving, and the remaining part is to replenish capital.

Automakers stated that they intend to overcome the challenges facing the industry, «building and deepen the relationship of cooperation in new areas and continuing to remain competitors.»

In the current fiscal year, Toyota spends seven times more on research and development than Suzuki. Which called the growing cost of manufacturing competitive cars as a reason for combining efforts with a partner.

Companies will strengthen technology and products on which each of them specializes. Toyota leads in the world to produce hybrid cars. Suzuki specializes in compact cars and succeeded in sales in the markets of developing countries. Companies will work together in new areas, including robotic driving technologies.

Such unions in the Japanese car industry are not news. Earlier, Mitsubishi was announced in the Renault-Nissan Alliance. And in the fall of 2017, Toyota agreed to exchange share packages and joint investments with Mazda Motor. Toyota received a share of 5.05% in Mazda, and Mazda — 0.25% in a larger automotive industry, in the construction of the plant in the US planned to invest $ 1.6 billion.

Suzuki previously made attempts to create an alliance with German Volkswagen, selling 20% of the shares.

In return, the Japanese wanted to get the production technologies for diesel engines, which Suzuki is not. But the German automaker did not share his know-how. His goal in creating an alliance was promoting to the huge automotive market of India, where Suzuki has a very strong position where Suzuki-Maruti has an enterprise. As a result, the partnership with Volkswagen was interrupted.