-- Toyota plans to raise its stake in Subaru to more than 20 percent from around 17 percent now, a deal that would also see Subaru invest in Japan's top automaker, two people with direct knowledge of the matter told Reuters.
Toyota's investment is likely to cost more than 70 billion yen ($650 million) based on Subaru's stock market value, said the Nikkei business daily, which first reported the news.
Subaru is likely to reciprocate with a stake in Toyota that would roughly equal the value of Toyota's additional investment, one of the people told Reuters.
Subaru is particularly strong in SUV strength and all-wheel-drive technology. The two automakers in June said they planned to jointly develop an electric SUV on a platform produced together, to split costs.
Toyota is by far the larger manufacturer, with 10.6 million cars and trucks produced in 2018. Subaru built 1 million vehicles last year, a decline of 5 percent and the first drop in seven years.
Toyota plans to make Subaru an equity affiliate after raising its stake, the Nikkei said, which would make it an asset on its balance sheet and included on income statements.
"The plan appears to be to ultimately make Subaru a fully owned subsidiary, to help create a 'mega Toyota.' This is the first step towards that," said Takeshi Miyao, managing director of Carnorama, a consultancy. "It's all about building scale."
Toyota said the stake increase reports are not based on any announcements from our company. "The Toyota group is considering various options to strengthen its competitiveness. We will publish anything when it is appropriate to do so," said Maki Niimi, a Toyota spokesman.
Subaru issued a similar statement with similar wording.
Toyota also owns stakes in Suzuki Motor and Mazda Motor, of less than 10 percent apiece.
Automakers, especially smaller ones such as Subaru, are struggling to meet the fast pace of change in an industry being transformed by the rise of electric vehicles, ride hailing and autonomous driving. They have been joining forces to slash development and manufacturing costs of new technology.
Ford and Volkswagen have said they will spend billions of dollars to jointly develop electric and self-driving vehicles.
Toyota seems to be particularly keen to build scale now by investing in smaller, domestic automakers, rather than forging cross-border tie-ups like some of its rivals.
It has been building its holding in Subaru since first acquiring a 9.5 percent stake in the smaller automaker, then called Fuji Heavy Industries, in 2005.
Toyota has been looking to expand scale in next-generation technology and said this year it would offer free access to patents for electric vehicle motors and power control units.
Toyota sta per salire al 20% di Subaru, ormai il colosso giapponese sta creando una serie di satelliti (Mazda, Suzuki, Subaru e Isuzu) con cui cooperare. È lampante l’imputa da parte del governo di impedire che le piccole case giapponesi finiscano in mano agli stranieri come avvenne negli anni 90. Alla faccia dell’ antitrust.