Toyota has confirmed that it will buy out the rest of mini-vehicle maker Daihatsu’s shares to make it a wholly-owned subsidiary of the world’s biggest automobile manufacturer. Toyota, which currently owns 51.2 per cent of Daihatsu, said that the buyout will help it better leverage the lower-cost brand.
Toyota will acquire the remaining Daihatsu shares by swapping 0.26 of its own shares for each Daihatsu share, the companies said. Daihatsu shares will be delisted after July 26, they added.
Toyota had flagged the move earlier this week.
Daihatsu had the weakest sales performance in the Toyota group last year, lagging behind the Toyota and Lexus brands and truck-maker Hino.
Daihatsu specialises in 660cc vehicles and produces models including the Mira and the Cast, while also supplying car bodies and engines to Toyota and Fuji Heavy Industries Ltd.
It competes fiercely with Suzuki in Japan, where both automakers each hold about 30 percent of the mini-vehicle market. But as mini-vehicle sales slump in Japan due to a rapidly ageing society and a lack of interest in car ownership among young people, the automakers have been looking to expand further into overseas markets.
Daihatsu has a 15 per cent market share of the passenger car market in Indonesia, where it manufactures the Ayla and other vehicles in a joint venture with Astra International. In Malaysia, it operates a joint venture which has a market share of around 20 per cent.
It also exports to Europe and North America, where some of its models have been sold under Toyota’s Scion brand which is targeted at the youth market.
It remains to be seen whether Toyota will bring the Daihatsu brand into India to compete with the likes of Nissan’s Datsun.
Global sales for Daihatsu slid 13.3 per cent in 2015. That pushed total Toyota group sales 0.8 per cent lower to 10.15 million, although the group retained the title of the world’s biggest carmaker, beating Volkswagen’s sales of 9.93 million.
The announcement by Toyota and Daihatsu comes days after the world’s largest automaker denied a media report that it is discussing possible tie-ups with Suzuki from a variety of angles, including cross-share holdings.