Meanwhile, Toyota and Suzuki are now involved in manufacturing a new model of SUV for the Indian Subcontinent. Under the alliance, Toyota plans to acquire 24,000,000 shares of common stock in Suzuki (equates to 4.94% ownership or JPY 96 billion).
The two companies began considering business partnership on October 12, 2016, and since then have continued to consider specific details.
Above: Toyota Glanza, a rebadged Suzuki Baleno. These minority acquisitions are aimed at helping the companies establish deeper ties with each other and result in quicker development of electric and hybrid vehicles.
With the industry bracing for changes, both partners look forward to overcoming new challenges.
In a statement on their capital alliance agreement, Toyota and Suzuki said: "The automobile sector is now experiencing a turning point unprecedented in both scope and scale, not only because of enhanced environmental regulations, but also from new entries from distinct industries and diversified mobility businesses".
First Trust Advisors LP boosted its holdings in shares of Toyota Motor Corp (NYSE:TM) by 11.9% during the 2nd quarter, according to its most recent filing with the Securities and Exchange Commission.
The automotive sector is going through a never-before turning point with new regulations and new entries into the automobile market. The companies want to strengthen the technologies and products in which each company specialises and their existing business foundation.
By teaming up, they will tackle "this transitional era" to promote tie-ups in new fields like autonomous vehicles.
Similarly, Suzuki plans to acquire, through purchase in the market, shares in Toyota equivalent to JPY 48 billion (half the amount which was paid by Toyota).
The formation of this alliance builds on the announcement in March this year that the two Japanese companies would pool their product development and production resources, with a focus on Toyota's electrification technologies and Suzuki's strength in compact vehicles. Earlier in 2019, Toyota agreed to share its hybrid tech with Suzuki for global use, particularly in India. Toyota will also develop two new small cars for the Indian market based on the Suzuki Ciaz and Ertiga, while additional product tie-ups are expected for the African market.
These share transactions will take place once it has been approved by foreign competition authorities.
More recently, VW - which previously had an alliance with Suzuki that was settled in 2015 after a four-year dispute - and Ford revealed further details of their partnership.