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Toyota planning to buy out Daihatsu Motor Co. not Suzuki as rumored.

Toyota Daihatsu buy out
Posted: January 27, 2016 at 11:31 am   /   by   /   comments (0)

Recently, the news of Toyota Motor Corp. & Suzuki Motor Corp. strengthening their ties has been doing the rounds in the global automotive industry. So far, we had refrained for making any comments on the news as there was no substance to the reports. However, in the light of some new developments that have just taken place, it seems there is no proposal doing the rounds between the two automotive giants.

Toyota Motor Corp. made it clear today that that there is no truth to the rumored partnership talks between them & Suzuki Motor Corp. Instead, Toyota is considering to buy out Suzuki’s rivals Daihatsu Motor Corp in a deal that is worth USD 3.2 Billion at the current market prices.

It is expected that once Toyota Motor Corp. gains full control over the Daihatsu it will help Toyota leverage its lower cost brands in a much better way also, cutting the procurement costs for Daihatsu. On the other hand a tie up with Suzuki Motor Corp. would have seen Toyota make deeper inroads into the Indian market where Suzuki Motor Corp. has a hold on more than half of the passenger car market.

Denying any reports of a merger between Toyota & Suzuki, Toyota said that, “Toyota is constantly considering a number of possibilities relating to Daihatsu, such as partnerships or business restructuring, including making the company a fully owned subsidiary but, no decisions had been made.”

Toyota already owns a 51.2% stake in Daihatsu, a company that specializes in 660cc mini-vehicles.

Earlier it was mentioned by the Nikkei business daily that Toyota and Suzuki were discussing ties from a variety of angles, including the possibility of cross-shareholdings as they look to take capitalize on demand for compact cars in India and other emerging economies.

Daihatsu shares rose by 16% today in Nikkei index following this report.

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