Toyota strengthens ties with Subaru maker Fuji Heavy

[Carlover76]

Toyota said it would spend some 31 billion yen ($307 million) - TOKYO, April 10 - Toyota Motor Corp. said on Thursday it would almost double its stake in Subaru maker Fuji Heavy Industries Ltd as part of an alliance aimed at more efficiently developing and producing cars. http://row.bc.yahoo.com/b?P=UlAdR8tU0eE61ebgRy7N6AL0OrneNkgHC0UABwMz&T=13vggt8dr%2fX%3d1208421189%2fE%3d38501218%2fR%3dsg_news%2fK%3d5%2fV%3d2.1%2fW%3dHR%2fY%3dSG%2fF%3d1345255879%2fQ%3d-1%2fS%3d1%2fJ%3dB0D154CB&U=13bbj88c6%2fN%3dGKpYIctU0eI-%2fC%3d620793.12569576.12918551.2013436%2fD%3dLREC%2fB%3d5325507

 

 

The pact, which also involves Toyota minivehicle unit Daihatsu Motor , is seen as throwing a lifeline to Fuji Heavy as it struggles to keep pace with larger, more efficient rivals and suffers from sluggish sales.

"No one really thought that Fuji Heavy could survive on its own with things just as they are," said JP Morgan auto analyst Takaki Nakanishi. "It needed a partner. It needed to wedge itself into the Toyota group."

Automakers around the world are under intense pressure to become more efficient as rising raw materials prices, on a global shift towards smaller, fuel-efficient cars and as the rise of competition from China and India threatens profitability.

Japanese carmakers are also feeling the pinch from the yen's recent surge against the dollar, which makes their exports to the key U.S. market less competitive and slices profits when repatriated. Weakening demand in the U.S. is another concern.

Toyota hopes the deal, which includes the joint development of a sports car and supply of a compact car to Fuji, will boost its line-up and keep costs in check as it continues a global expansion that has seen it double sales in the past decade.

"Looking out three to five years, this gives us the best battle formation to compete globally," Toyota President Katsuaki Watanabe told a group of reporters after a news conference.

Toyota said it would spend some 31 billion yen ($307 million) to buy 61 million existing shares in Fuji Heavy currently held as treasury stock, boosting its stake to 16.5 percent from 8.7 percent.

Fuji Heavy and Toyota plan to jointly develop a compact rear-wheel-drive sports car that will be produced at a new Fuji Heavy factory in Japan but marketed by both companies when it is rolled out by the end of 2011.

Toyota will also supply Fuji Heavy with a compact car on an original equipment manufacturer basis from around 2010 to help it round out its line-up, while Daihatsu will supply Fuji Heavy with minivehicles and a version of its Coo compact car.

Fuji Heavy President Ikuo Mori said the alliance would eventually lead to its withdrawal from minivehicle production, underscoring its growing reliance on the Toyota group.

"We will take a step into the Toyota group while maintaining the independence of our management and brand," Ikuo said.

Toyota bought the 8.7 percent stake in Fuji Heavy in 2005, replacing General Motors as its top shareholder.

Industry watchers are keen to see if Toyota will lift its stake further. Toyota took minority stakes in Daihatsu and truck maker Hino Motors Ltd before turning them into majority-owned subsidiaries years later.

Toyota's Watanabe said he was not thinking of raising its stake in Fuji Heavy or in dispatching executives to its board.

"In a sense, a 16.5 percent stake doesn't really mean anything. It's a halfway measure," JP Morgan's Nakanishi said. "Over the long term, I would expect the stake to be lifted to solidify a sense of unity or common fate with the Toyota group."

Prior to the announcement, shares in Toyota closed down 1.4 percent at 4,830 yen, Fuji Heavy lost 3.2 percent to 399 yen and Daihatsu dropped 3.1 percent to 1,079 yen. The benchmark Nikkei 225 average ended 1.3 percent lower. (Reporting by Nobuhiro Kubo, Nathan Layne and Chang-ran Kim; Editing by David Hulmes)

 

Above News Extracted from : http://sg.news.yahoo.com/rtrs/20080410/tbs...ta-7318940.html

Edited April 17, 2008 by Carlover76

[Zakuii]

good news imo. we'll get fuel efficient subarus and turbo-charged toyotas.

[Carlover76]

Yes, eventually the whole car makers will be owned by Toyota.

[Zuoom]

and with that, we get this...

http://www.celicasg.org/index.php?topic=2864.0

 

supposedly the "8th Gen Celica".

Edited April 17, 2008 by Zuoom

[Application9999]

May be one day Borneo motor will take over Subaru distribution

[Magfocus]

Thats true provided they don't Toyota-rise the Subarus

[YellowFlash]

tomyam subarus

Edited April 17, 2008 by Isaac85

[Magfocus]

Scary thought...as if Toyotas arent bland enough..

[Dynaway]

no no.... its call Toyobaru.... muahahah

[So_nice]

or sub-yota?