Toyota Motor Corporation and Suzuki Motor Corporation have announced that the two companies entered into an agreement regarding a capital alliance today. The alliance will serve to establish and promote a long-term partnership between the two companies for promoting collaboration in new fields, including that of autonomous driving.

They plan to acquire each other’s shares based on this alliance. Toyota has stated that it plans to purchase 24,000,000 shares of common stock in Suzuki. That amounts to 4.94 percent ownership of the total number of shares issued by Suzuki as of March 31, 2019 worth 96 billion Japanese Yen (JPY). Similarly, Suzuki plans to purchase shares in Toyota equivalent to 48 billion JPY.

The alliance will serve to establish and promote a long-term partnership between the two companies for promoting collaboration in new fields, including that of autonomous driving.

These share acquisitions will be implemented after the companies receive approvals from the foreign competition authorities. Toyota and Suzuki first began considering a business partnership in October 2016. On March 20 this year, the companies announced that they would engage in joint product development and collaboration in production, in addition to promoting the mutual supply of products. The tie-up would bring together Toyota’s electrification technologies and Suzuki’s technologies for compact vehicles.

In a statement, Toyota has mentioned that the automobile sector is currently experiencing a turning point unprecedented in both scope and scale. This is as much due to enhanced environmental regulations, as it is because of new entries from different industries and diversified mobility businesses.

Suzuki plans to purchase shares in Toyota equivalent to 48 billion JPY.

The two companies intend to achieve sustainable growth by overcoming new challenges surrounding the automobile sector. They will build and deepen cooperative relationships in new fields. They will do so while continuing to be competitors, in addition to strengthening the technologies and products in which each company specializes and their existing business foundations, it stated.