Toyota, Suzuki Motor deny report of partnership talks

The Nikkei had reported that the companies were discussing a possible partnership from a variety of angles, including a cross-shareholding deal

Japan's Toyota Motor and Suzuki Motor Corp denied a newspaper report they were discussing a potential partnership that could include a capital tie-up.

The Nikkei business daily said in a front-page report on Wednesday that Suzuki, Japan's fourth-largest automaker, and global top-seller Toyota were discussing a possible partnership from a variety of angles including a cross-shareholding deal.

“It is not true that we have entered negotiations over a tie-up with Toyota," Suzuki said. Toyota issued a similar statement.

Despite the denials, shares in Suzuki maintained strong gains, climbing 10% in morning trade. Toyota was up 3.6%, while other Japanese auto stocks also made robust gains.

The Nikkei also reported that Toyota is planning to turn Suzuki's main domestic competitor Daihatsu Motor into a wholly-owned subsidiary through an equity swap.  
 

Toyota owns 51.2 % of Daihatsu.

Toyota and Daihatsu said in separate statements that the group has been considering various options, including turning Daihatsu into a wholly owned unit, but that nothing has been decided.

Toyota and Suzuki are looking to take advantage of each other's know-how and capitalise on demand for compact cars in India and other emerging economies, the Nikkei said without citing sources.

Suzuki, which specialises in small cars, is India's top-selling car maker through its local unit Maruti Suzuki India Ltd.

But the automaker has long been under pressure to find a bigger partner to develop next-generation fuel-saving technology as governments around the world tighten emissions and fuel economy regulations.

Suzuki formed a capital alliance with Volkswagen AG in early 2010 but relations soon soured, leading to a years-long dispute in arbitration court that ended last year with the unwinding of their cross-shareholding.