Here’s something that would be of interest to Malaysians, as it involves not just the world’s No.1 carmaker, but the Japanese partners of national carmakers Perodua and Proton. Reuters reports that Toyota is considering buying out the rest of Daihatsu that it does not already own, while denying a report that it was in partnership talks with Suzuki.

Daihatsu is a stakeholder in Malaysian market leader Perodua, while Suzuki is the latest partner of national carmaker Proton. Both Daihatsu and Suzuki specialise in compact cars and are direct rivals in Japan.

The report notes that full control of Daihatsu could help Toyota leverage the lower-cost brand better and cut procurement costs for the former, while capital ties with Suzuki would help the the big T make inroads into India, where Suzuki commands around half the passenger car market via Maruti Suzuki.


Toyota-Daihatsu ties started in 1967 and the giant took a majority stake in Daihatsu in 1998. It currently owns 51.2% of the compact car maker, and taking Daihatsu private would cost Toyota US$3.2 billion at current market prices. Daihatsu shares jumped 20% today in reaction to Toyota’s statement.

“We are constantly considering a number of possibilities relating to Daihatsu, such as partnerships or business restructuring, including making the company a fully owned subsidiary,” Toyota said in a statement, adding that no decisions had been made.

As for the links with Suzuki, Japanese business daily Nikkei reported that Toyota and Suzuki were discussing ties from various angles, including the possibility of cross-shareholding as they look to take capitalise on demand for compact cars in India and other emerging markets.

“I can easily see the Daihatsu brand used in the same way that VW uses Skoda, or Renault uses Dacia, or Nissan uses Datsun as a low-cost, sub-premium brand to the core brand,” said CLSA senior research analyst Christopher Richter. “That could be a very effective weapon against Suzuki in places like India. If I were Suzuki that would sound like a risk to doing business with Toyota,” he added.

Others noted that a Toyota-Suzuki partnership could be win-win. Suzuki has an unrivalled distribution network in India that Toyota can benefit from, while Suzuki would be getting a stable shareholder, plus access to Toyota’s hybrid, fuel-cell and other next-gen tech geared towards future vehicle electrification, JP Morgan analysts noted.

However, Suzuki is expected to tread carefully with any potential tie-up with a giant carmaker after its previous capital alliance with Volkswagen soured, leading to a lengthy legal dispute that only ended last year with the unwinding of their cross-shareholdings. More on the Suzuki-VW failed marriage here.

An interesting development from Japan that may impact the Malaysian national car scene in the long run, if it happens. We’ll keep tabs.