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Toyota $3.2 Billion Deal To Transform Daihatsu Into Wholly-Owned Subsidiary

Toyota Motor Corp is set to invest significantly to transform Daihatsu Motor Co. into a leading car brand as valued as the BMW Mini.

Toyota $3.2 Billion Deal To Transform Daihatsu Into Wholly-Owned Subsidiary

The world’s leading automaker will spend up to $3.2 billion in stock money to spin Daihatsu into a wholly owned subsidiary.

Akio Toyoda, Toyota President, wants to split the Daihatsu and Toyota brands to speed up decision making in the company.

In a press conference Friday, Toyoda said, ‘Let me assure you that the Daihatsu brand will never disappear.’

‘It will be like Mini for BMW. That’s what we should aim for,” he added.

In face of rising costs of adhering to environmental regulations, coupled with slow global sales, Toyota is working more closely with other automakers in Japan.

Last year, Toyota said it would strengthen its ties with Mazda Motor Corp. It is reported that the company is also keen on collaborating with Suzuki Motor Corp.

Slow sales growth

In 2015, Daihatsu suffered massive losses in worldwide sales with sales declining by 13 percent down to 794,000 cars. The leading minicar brand in Japan also witnessed local sales decline by 14 percent.

Mini-vehicles, whose largest market being is Japan, have increasingly become a fun car to drive, Toyoda said.

Indonesia is the second largest market outside of Japan for Daihatsu but even there, sales have dropped by 10 percent in the past six months of the fiscal year.

Toyota owns Hino Motors Ltd in majority stakes and the maker, of Subaru, Fuji Heavy Industries Ltd, and Isuzu Motors Ltd. in minority stakes.

The Daihatsu brand dates back to 1907, when several businesspeople and academics established a company in Osaka to manufacture engines. Since 1998, Toyota has owned majority stakes in Daihatsu, which has been the main supplier of mini-cars for Toyota since 2011.

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