Toyota to buy out rest of Daihatsu Motor to make it a wholly owned unit1 min read . Updated: 29 Jan 2016, 01:21 PM IST
Toyota to buy remaining shares through share swap; Daihatsu competes with Suzuki in mini vehicles
Tokyo: Toyota Motor Corp. said on Friday it would buy out the rest of mini vehicle maker Daihatsu Motor Co, a move that will help it better leverage the lower-cost brand.
The world’s largest automaker currently owns 51.2% of Daihatsu, which had the weakest sales performance in the Toyota group last year, lagging behind the Toyota and Lexus brands and truck maker Hino Motors Ltd.
Toyota will acquire the remaining Daihatsu shares by swapping 0.26 of its own shares for each Daihatsu share, the companies said on Friday. Daihatsu shares will be delisted after 26 July, they said.
Toyota had flagged the move earlier this week.
Daihatsu specialises in 660 cc vehicles and produces models including the Mira and the Cast, while also supplying car bodies and engines to Toyota and Fuji Heavy Industries Ltd.
It competes fiercely with Suzuki Motor Corp in Japan, where both automakers each hold about 30% of the mini vehicle market.
But as mini vehicles sales slump at home due to a rapidly ageing society and a lack of interest in car ownership among young people, the automakers have been looking to expand further into overseas markets.
Daihatsu has a 15% market share of the passenger car market in Indonesia, where it manufactures the Ayla and other vehicles in a joint venture with Astra International. In Malaysia, it operates a joint venture which has a market share of around 20%.
It also exports to Europe and North America, where some of its models have been sold under Toyota’s Scion brand targeted at the youth market.
Global sales for Daihatsu slid 13.3% in 2015. That pushed total Toyota group sales 0.8% lower to 10.15 million, although the group retained the title of the world’s biggest automaker, beating Volkswagen’s sales of 9.93 million.
The announcement by Toyota and Daihatsu comes days after the world’s largest automaker denied a media report that it is discussing possible tie-ups with Suzuki from a variety of angles, including cross-share holdings. Reuters