Toyota maintains global lead with 10.15m sales but seeks partnership
Toyota is exploring business partnerships to strengthen its position in emerging markets, even as the Japanese group extended its reign as the world’s top-selling carmaker for a fourth year.
The company said on Wednesday that its group – which includes subsidiaries Daihatsu and Hino – sold 10.15m cars and trucks in 2015. That put it ahead of Germany’s Volkswagen, which sold 9.9m vehicles as it was engulfed by an emissions scandal last year, and General Motors, which sold 9.8m.
Still, a slowdown in emerging markets such as Indonesia and Thailand has already prompted Toyota to warn that sales will probably be flat this year.
In a move analysts say could be aimed at tackling that challenge, Toyota said on Wednesday that it was considering taking full control of Daihatsu, a maker of small cars with strength in Japan, Malaysia and Indonesia.
The news sent shares in Daihatsu, which is owned 51 per cent by Toyota, racing ahead by 16 per cent in Tokyo trading.
Separately, a person familiar with the matter said Toyota was considering a partnership with Suzuki Motor — which also specialises in small cars and has a strong foothold in India — as one of various options it was exploring.
Shares in Suzuki surged 11 per cent while Toyota jumped 3.8 per cent after the Nikkei business daily reported that the two carmarkers were in talks to cooperate in safety and energy-saving technologies, and in the Indian market.
In separate statements, both companies denied they were discussing a partnership.
Joint projects and partnerships between auto rivals have become increasingly common worldwide amid rising costs to develop new technologies and tighter regulations to reduce carbon dioxide emissions.
Honda and GM work together in fuel cell technology, while Daimler and the Renault-Nissan alliance have a similar partnership. Toyota also has tie-ups with Mazda and Subaru maker Fuji Heavy Industries.
Toyota has long struggled in India, where sales of its Etios compact sedan have fallen since its 2010 launch. Suzuki controls nearly half the market in India via its Maruti Suzuki affiliate.
Koji Endo, an analyst at Advanced Research Japan, questioned whether Maruti Suzuki would allow Toyota to use its sales network to expand in India even if a tie-up were agreed. “There is no incentive for Maruti to help Toyota,” Mr Endo said.
Another possibility would be for Suzuki to tap into Toyota’s expertise in hybrid technology and cost controls, to address rising environmental problems in India.
Suzuki and Daihatsu could also cooperate loosely by using common parts and cutting costs as they seek opportunities outside their shrinking home market for compact cars, according to Mr Endo.
Analysts have predicted Suzuki could link up with either GM or Toyota, after it spent Y460bn ($3.9bn) last year to buy back a 19.99 per cent stake from VW. The repurchase came after an international arbitration court ended a long-running spat between the two groups.
Source: Financial Times