January 27, 2016: Japanese auto majors Toyota Motors and Suzuki Motors have denied a newspaper report that they were discussing the possibility of a partnership including a cross-shareholding deal.
But Toyota confirmed that it is considering buying out the remaining 49 per cent stake in Daihatsu in which it has majority control. “We are constantly considering a number of possibilities relating to Daihatsu, such as partnerships or business restructuring, including making the company a fully owned subsidiary,” said Toyota.
Both leading automakers, who have a strong presence in India, denied reports published by Japanese daily Nikkei that they had entered into negotiations. If the two were to combine, they could emerge as the most powerful automobile entity in India.
The newspaper said the two were considering various options to capitalise on the huge demand for compact cars in India and other emerging economies. Daihatsu Motor Co is a rival to Suzuki and specialises in small cars, demand for which is huge in India.
Maruti Suzuki India is the largest automaker in India and has ambitious expansion plans. Analysts say that if the two Japanese giants were to collaborate, they would be able to dominate the Indian automobile sector across various segments.
About five years ago, Suzuki had entered into a tie-up with Germany’s Volkswagen, but the association soon soured and ended up in an arbitration court. The dispute was finally resolved last year.