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Toyota Motors and Suzuki Motor Corporation have entered into a capital tie-up with each other in the market. The Toyota-Suzuki alliance will see both companies develop a long-term partnership with each other.
Toyota is currently planning to acquire 2.4 million shares of common stock in Suzuki. This will be done by way of adjusting the treasury shares through a third-party allotment in Suzuki. This translates to around 5 per cent ownership of shares of Suzuki with a total value of JPY 96 billion for the shares.
Suzuki in exchange will also acquire shares of Toyota through the market. These shares will add up to a total value of JPY 48 billion (equivalent to Rs 32.58 billion).
The joint statement, released by Toyota-Suzuki alliance, stated, "The execution of the capital alliance agreement is a confirmation and expression of the outcome of sincere and careful discussions between the two companies, and it will serve for building and promoting their future partnerships in new fields."
It further mentioned, "These share acquisitions will be implemented after the companies obtain approvals from the foreign competition authorities."
The Toyota-Suzuki alliance in India first began in 2016, when the two Japanese companies decided to partner together to develop new technology for the Indian market.
The partnership between the two Japanese auto giants in India was made in order to develop and build new technologies and solutions in the Indian electric mobility segment. The two companies would also share their knowledge to develop India-specific models with the development and production process shared between them.
The Toyota-Suzuki Alliance in India will also look at developing charging infrastructure and electric vehicles in the Indian market at a faster rate. The development of the fast charging technology developed by the alliance between the two companies will compete against the global auto industry.
Toyota India also recently launched its first re-badged vehicle shared by Suzuki in India, the Glanza. The Toyota Glanza is a premium hatchback, based on Suzuki's popular Baleno offering in the Indian market. Apart from the Glanza, both companies are also looking at sharing other models for the Indian market in the coming months as well.
Thoughts On The Toyota-Suzuki Alliance & Capital Tie-Up
The Toyota-Suzuki Alliance is a big step forward in the partnership deal between the two Japanese giants in the auto sector. What this also means for India is that the two companies will now share their knowledge to develop and introduce global standards of technological solutions in the country at a much faster pace.