Toyota Motor Corp (7203.T) plans to raise its stake in Subaru Corp (7270.T) to more than 20% from around 17% now, a deal that would also see the smaller firm invest in Japan’s top automaker, reports Trend citing to Reuters.
The deal is due to be approved at a Toyota board meeting on Friday, the people said, declining to be identified because the information has not been made public.
The investment would come a month after Toyota and another smaller Japanese automaker, Suzuki Motor Corp (7269.T), said they would take small equity stakes in each other. Such tie-ups highlight how automakers are scrambling to chase scale, manage costs and boost development.
Traditional car makers, especially smaller ones like Subaru and Suzuki, are struggling to meet the fast pace of change in an industry being transformed by the rise of electric vehicles, ride hailing and autonomous driving.
Toyota’s investment is likely to cost more than 70 billion yen ($650 million) based on Subaru’s stock market value, said the Nikkei business daily, which first reported the news.
Subaru is likely to reciprocate with a stake in Toyota that would roughly equal the value of Toyota’s additional investment, one of the people told Reuters.
Representatives for both Toyota and Subaru said the news was not something that had been announced by their companies.
"The plan appears to be to ultimately make Subaru a fully owned subsidiary, to help create a ‘mega Toyota’. This is the first step towards that,” said Takeshi Miyao, managing director of Carnorama, a consultancy.
"It’s all about building scale.”www.anews.az