Toyota buying rest of Daihatsu unit for $3.2b in stock

Tokyo: Toyota Motor will buy out its Daihatsu Motor unit for about 389 billion yen ($3.2 billion) in stock, making a key unit for small cars sold in Southeast Asia and Japan a wholly-owned subsidiary.
The world’s largest automaker expects to offer 0.26 share for each share of Daihatsu in an exchange of stock scheduled to take effect on August 1, according to a statement. Daihatsu will stop trading on July 26 and de-list the following day. Toyota rose 4.6 per cent to 7,200 yen at the close of Tokyo trading, before the announcement.
Toyota is forging closer ties with its Japanese peers as automakers face rising costs of meeting tougher environmental standards and the challenge of navigating slower global sales growth. The carmaker said last year it would deepen collaboration with Mazda Motor Corp., and it’s reportedly considering an alliance with Suzuki Motor.
"This is an opportunity for us both to stop feeling that we need to go it alone, and trust each other to take full advantage of our respective strengths," Toyota President Akio Toyoda said in the statement.
Although Toyota was the only automaker to sell more than 10 million vehicles worldwide last year, its deliveries slipped 0.8 per cent to 10.15 million. Sales for German rival Volkswagen fell two per cent and General Motors eked out a 0.2 per cent increase, underscoring the slower pace of growth for the global industry that’s expanded every year since 2009.
Daihatsu struggled last year, with sales slumping 13 per cent to 794,000 vehicles. The leader in Japan’s minicar segment saw domestic deliveries decline 14 per cent, after a price war with Suzuki for sales leadership during the last fiscal year pulled ahead demand.
The small-car maker also has been slumping in Indonesia, with deliveries dropping 10 per cent through the first half of its fiscal year. Daihatsu builds vehicles for Toyota in Indonesia, where its share of industry-wide production was about 39 per cent in the last fiscal year.
Toyota may not be done in spurring more consolidation within Japan’s auto industry. The carmaker is studying a potential partnership with Suzuki, the Nikkei newspaper reported on Thursday, a day after the two companies denied being in talks.
Toyota also owns a majority of truck maker Hino Motors and has minority stakes in Subaru maker Fuji Heavy Industries and truck maker Isuzu Motors Ltd.
Daihatsu traces its beginnings to March 1907, when two academics and a group of businessmen set up a company in Osaka, Japan’s second-largest city, to produce internal combustion engines. Toyota first tied up with Daihatsu in 1967, has owned its majority stake since 1998 and has been supplied Toyota- branded minicars since 2011.