Suzuki and Toyota minority stake deal given the nod by Competition Commission of India: What this means

The competition watchdog in India has approved the minority stake deal between Toyota Motor company and Suzuki Motor Corp, but what

By:Published: November 27, 2019 10:51:28 AM

Toyota Motor Corporation and Suzuki Motor Corporation had announced that the two Japanese automakers would team up and collaborate on developing future technologies. As a part of the deal, both entities would acquire a minority stake in each other globally. Now the Competition Commission of India has approved the minority stake purchase as well.

The transaction between the two Japanese firms involves an acquisition of a minority and insignificant shareholding between the two companies. Toyota has acquired 4.94% stake in Suzuki, while Suzuki has acquired 0.24% stake in Toyota.

According to the fair trade regulator in India, the reason for the proposed transaction is to establish and promote a long-term partnership between the two entities for future collaborations in new fields which include electric vehicles, hydrogen fuel cells and even autonomous vehicles.

 The statement released by the Competition Commission of India states that “Although both the parties are active in the broad automobile sector in India, their overlapping business activities arise only in the relevant markets of compact passenger cars and mid-size passenger cars”.

As a part of this global collaboration between Toyota and Suzuki, in India, the first step for both manufacturers include sharing existing models and re-badging and redesigning them allowing both manufacturers enter new segments in the Indian market. The first example is the Toyota Glanza which is a rebadged version of the Maruti Suzuki Baleno. Other projects planned in the immediate future include a reworked version of the Maruti Suzuki Brezza and the Ertiga which are to be used by Toyota to offer a sub-compact SUV in the Indian market and a smaller 7-seat MPV to sit below the Toyota Innova.

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