Toyota is reportedly mulling over plans to purchase the remainder of Daihatsu, and is also said to be thinking of a tie-up with Suzuki.
Under a plan currently being considered, Toyota would purchase the remainder of Daihatsu and delist it from the Tokyo Stock Exchange, but could still allow current investors to keep small stakes in the mini car specialist.
In a statement to Reuters, Toyota said that although no decision had yet been reached it is “constantly considering a number of possibilities relating to Daihatsu, such as partnerships or business restructuring, including making the company a fully owned subsidiary”.
Toyota has had a relationship with Daihatsu since 1967 and purchased a majority stake in the kei car leader in 1998. Daihatsu currently develops kei cars sold by both companies.
Daihatsu is also the lead partner in the companies’ small people mover programme in Indonesia, with the smaller firm developing and producing the top-selling Daihatsu Xenia and Toyota Avanza body-on-frame seven-seat tall wagon.
If Toyota goes ahead with the purchase of Daihatsu, it could seek cost savings through joint procurement, parts standardisation, and departmental consolidation.
Toyota is also rumoured to considering a partnership with Suzuki, with the Nikkei reporting that the two may participate in an equity swap.
For Toyota, a link up wit Suzuki would provide it access to the growing car market in India, which Toyota has yet to successfully crack.
Last year Maruti-Suzuki captured an amazing 46.5 percent of new passenger car sales in India, growing its market share from 45.4 percent the year before, despite ever-stronger competition, and in a year when passenger car registrations were at all time high of 2.7 million vehicles.
After Suzuki’s failed link up with Volkswagen, it’s said that the company would welcome a stable long term investor, as well as access to Toyota’s advanced drivetrain technology, including hybrid and fuel cell powertrains.
One concern with such a deal is how Toyota would manage the Suzuki and Daihatsu rivalry in key markets, such as Japan and Indonesia.