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Daihatsu to Become Wholly-Owned Subsidiary of Toyota by August

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Daihatsu to Become Wholly-Owned Subsidiary of Toyota by August

Toyota announced at the end of last week that its subsidiary, Daihatsu Motor, will transition into a wholly-owned subsidiary of the Japanese auto giant via a share exchange. This process is estimated to be wrapped up by August of this year.

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According to Toyota, the arrangement is mutually beneficial. Doing so will allow the automakers to develop a more unified strategy in the small car segment, allowing for the development and ultimately the production of higher quality vehicles. Toyota promises that customers will still see friendly competition and different products from the two brands, especially as each maintains its own management styles that work for their specific employees and company culture. That said, the unified global strategy will help the automakers “overcome otherwise prohibitive obstacles.”

Prior to this arrangement, Toyota owned just slightly more than 51% of Daihatsu. This arrangement will, of course, bump that percentage to 100. Shares for Daihatsu are expected to be delisted by July of this year.

Some experts are guessing that an unspoken motivator for this agreement is so that Toyota can more easily meet fuel efficiency rating regulations, by developing mini cars more quickly. Daihatsu is known for its super small but super efficient mini cars. Does this mean we could see Smart Car-sized vehicles (or smaller?) from Toyota roaming American streets in the near future? Possibly, though Toyota has said very little about the acquisition.

Toyota president Akio Toyoda did release the following statement: “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. In other words, we can now focus on our core competencies. That, I believe, is the key to achieving and sustaining global competitiveness.”

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