TOKYO — Toyota and Suzuki will take small equity stakes in each other, the Japanese car makers said on Wednesday, as they seek to develop newer technologies and meet sweeping changes upending the global auto industry.
The tie-up is the latest example of automakers chasing scale to manage costs and boost development. Automakers — especially smaller ones like Suzuki — are struggling to meet the breakneck growth of an industry transformed by the rise of electric vehicles (EVs), ride-hailing and autonomous driving.
Toyota will pay around 96 billion yen ($908 million) for a 4.94% stake in Suzuki, while Suzuki will acquire in the market around 48 billion yen ($454 million) worth of shares in Toyota. That is equivalent to 0.2% of Toyota's shares as of Wednesday's closing price, before the announcement.
The companies said in a joint statement they intended to overcome challenges facing the industry by "building and deepening cooperative relationships in new fields while continuing to be competitors". They said they would strengthen technologies and products in which each of them specialize in.
The firms had said in 2016 they were exploring a partnership, citing technological challenges and the need to keep up with industry consolidation. Earlier this year they said they would produce EVs and compact cars for each other.
Automakers around the globe 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.
Shares of Toyota and Suzuki closed little changed before the announcement.
Toyota has been looking to expand scale in next-generation technology and said this year it would offer free access to patents for EV motors and power control units. It believes that move would help it cut by as much as half the outlays for expanded electric and hybrid vehicle components in the United States, China and Japan.
Supplying rivals would greatly expand the scale of production for hardware.
Suzuki, which specializes in affordable compact cars, had been struggling to keep pace with the huge costs of investing in research and development for automated driving functions.
Toyota said in June it aims to get half of its global sales from electrified vehicles by 2025, five years ahead of schedule, and will tap Chinese battery makers to meet the accelerated shift to electricity-powered cars.