Toyota buys remaining Daihatsu shares

TOYOTA Motor Corporation has taken full control of Daihatsu Motor Co through a share exchange, in a deal designed to give Toyota a bigger footprint in emerging markets via Daihatsu’s small cars.

Before the take-over, Toyota owned a 51.2 per cent stake in Daihatsu, and to acquire the remaining shares it will swap 0.26 of its own shares for every share in Daihatsu which will then be delisted come July 27, 2016.

According to Toyota, the deal – said to be worth $US3 billion ($A4.1b) – will help produce a “unified strategy” for its small car line-up where both brands will continue to focus on their respective areas of strength.

While the two brands will continue to “engage in friendly competition”, and maintain their distinct management styles, the deal will help reduce the cost of technology development and entry into new segments or markets.

Daihatsu will “take the lead” in developing small-car line-ups for both brands and it will continue to focus on its core mini or ‘kei’ car know-how.

Development costs for new technologies will be shared, and while Toyota will continue to focus on environmentally friendly tech, as well as the areas of user experience and comfort, Daihatsu will “leverage its aptitude for turning technologies into packages for vehicles, as well as developing cost- and fuel-efficient technologies”.

“Daihatsu will also contribute to the development of next-generation technologies from the perspective of cost-efficiency and miniaturisation,” the statement says.

“The company's specialised car manufacturing expertise will be shared within the Toyota Group, which will contribute to further enhancing the cost competitiveness of larger vehicles.”

The brands will use each other’s bases in emerging markets to keep costs down, while in Japan, Daihatsu will use Toyota’s sales infrastructure and expertise to help lift its brand.

Daihatsu produces kei cars and minivans for the Japanese domestic market and some smaller markets, with models including the Move, the Materia and the Mira.

Global sales of Daihatsu models took a dive last year, dropping 13.3 per cent compared with 2014, to 794,000 units.

Speaking at the announcement of the deal in Japan this week, Mr Toyoda said the deal with Daihatsu would help both companies achieve sustainable growth.

“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,” he said. “In other words, we can now focus on our core competencies. That, I believe, is the key to achieving and sustaining global competitiveness.”

Daihatsu president Masanori Mitsui added that the strong connection with Toyota would lift the brand globally.

“I believe we have now found a course of action that will enable us to continue our growth for the next 100 years,” he said. “We see this as the perfect opportunity to cement our relationship with Toyota, and, by doing so, to embark on a new period of growth, and to elevate the Daihatsu brand to a global standard.”

The small Japanese brand arrived in Australia in 1975 but was shut down by Toyota in 2005 after slowing sales in an increasingly competitive new-car market.

Throughout the 1980s and 90s Daihatsu sold models such as the Charade, Applause, Sirion and Copen convertible Down Under as well as quirkier fare including the high-riding Terios, YRV and Pyzar.