Toyota Motor Corp said on Thursday that it will almost double its stake in the Japanese maker of Subaru-brand vehicles as part of a global expansion that has put it on course to become the world number one.
Toyota will pay ¥31.1 billion ($308 million; Dh1.13 billion) to raise its stake in Fuji Heavy Industries to 16.5 per cent from 8.7 per cent, a company statement said. It will purchase 61 million Fuji Heavy shares from the company itself.
The two firms will also deepen ties in research and product development, with plans to jointly launch a compact sports car.
"I think we can build a win-win relation," Toyota president Katsuaki Watanabe told reporters.
Toyota bought its present stake in Fuji Heavy from GM in 2005. As part of an existing alliance, Fuji Heavy produces Camry vehicles in North America for Toyota, which in turn helps its partner in environmental technologies.
Fuji Heavy also sells Justy compact cars in Europe under an original equipment manufacturers' (OEM) contract with Daihatsu Motor Co, another Toyota unit that makes mini cars.
"Toyota and Fuji Heavy have so far failed to produce any synergies, just like GM and Fuji had difficulties in achieving synergies when they were in partnership," Okasan Securities analyst Yasuaki Iwamoto said.
"But this deal marks a clear first step in their alliance," he said.
Under the expanded alliance, Toyota and Fuji Heavy will jointly develop and market compact sports cars using Fuji's proprietary Boxer, or horizontally opposed engine, which is similar to Porsche AG's engine.
The two companies aim to release a new front-engine rear-drive sports car in 2011 and make them at a new assembly line to be built at Fuji's Ota plant in the Gunma prefecture north of Tokyo.
Toyota will also supply its compact cars to Fuji under an OEM contract before the end of 2010.
Separately, Daihatsu will also supply its Coo mini and compact cars to Fuji Heavy for sales in Japan under the OEM deal. Beginning from October this year, Fuji will procure some 6,000 Coo vehicles a year from Daihatsu.
"While maintaining our own independence, we are taking one step further into the Toyota group to build a new relationship," said Fuji Heavy president Ikuo Mori.
"We will work so that this will lead to global growth for both of us," he told reporters.
Toyota is widely expected to become the world's top-selling automaker this year, overtaking Detroit giant General Motors.
The Japanese maker has expanded aggressively outside of its home market, helped by its reputation for fuel efficient vehicles, including petrol-electric hybrids, which have generated strong interest at a time of soaring oil prices.
With the US economy losing steam, Toyota is relying increasingly on emerging economies such as China and Russia to underpin its rapid expansion. (AFP)
Toyota to boost stake in Fuji Heavy