Suzuki and Toyota are teaming up to co-develop autonomous car technology in a capital sharing alliance.
Things are tough out there. Slowing car sales and a trade war between the US and China are causing automakers to look around for anyone who might share the cost of developing new technologies. Toyota has been very successful when it comes to partnering up with other carmakers, having already gotten in bed with Subaru, Mazda, and Yamaha to varying degrees. Now it’s Suzuki’s turn.
Just announced this week, Toyota and Suzuki have entered into a capital alliance that will see each company buy a portion of the other’s outstanding shares. Toyota plans to buy 24,000,000 shares of Suzuki for just under 5% ownership of the smaller Japanese carmaker. That works out to roughly $902 million USD at current market prices.
Suzuki, meanwhile, will acquire roughly $450 million in Toyota shares.Negotiations between the two carmakers began in October of 2016, but it wasn't until Mach of this year that Toyota and Suzuki began "specific considerations in order to engage in joint product development and collaboration in production."
Specifically mentioned in their joint release is autonomous and self-driving car technology, which the two companies will jointly explore "while continuing to be competitors." Which sounds a lot like having your cake and eating it too, but that’s the corporate world for you.
Toyota brings the most to this party, including its own autonomous vehicle program and electrified powertrains. Suzuki brings their love of small, compact, and affordable cars, such as the wildly successful Jimny compact SUV.
Suzuki appears to be the clear winner in this arrangement as the smaller carmaker doesn’t have nearly the same kind of cash reserves to devote to research and development. Toyota also has a leg-up when it comes to self-driving technology as they’ve been active in the segment for several years and are even rolling out their own nascent self-driving technology in their Lexus luxury brand.