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It’s confirmed, Daihatsu is set to become a wholly-owned subsidiary of Toyota through a share exchange that will be completed in August 2016. An agreement has been reached between both companies, where a unified strategy for the small car segment will be employed for the purpose of developing better cars. In addition to that, the share exchange is set to add more value to both brands.

With the shared strategy, it will enable both Toyota and Daihatsu to overcome obstacles that they may face in the future. This includes resource-intensive activities like the development of next-generation technologies and the entry into business areas that have growth potential.

In detail, the agreement will see Toyota and Daihatsu combine their base of operations, which will have them share expertise in various areas. In turn, this will allow for the two entities to develop more appealing products that are competitive on a global scale.

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Three key areas have been underlined, the first, being small cars. Here, Daihatsu will lead in developing products offered within the small car lineup of both brands. It will continue to maintain its focus on developing vehicles where the brand already has a strong presence. On top of that, it will sharpen its expertise and processes related to product planning and tech development for mini vehicles.

The second area, will be technology. Both will share development and deployment strategies for new technology from early stages. Toyota will focus on technologies associated with the environment, safety, user experience and comfort. Daihatsu, on the other hand, will turn technologies into packages and will lead the development of cost and fuel efficient technology.

Further to that, Daihatsu will contribute to the development of next-gen tech with a focus on cost-efficiency and down-scaling said tech. Manufacturing expertise will be shared amongst the Toyota group with the aim of achieving better cost competitiveness of larger vehicles.

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The third area, will have both companies utilising each other’s base of operations in developing markets. Daihatsu will lead in elevating efficiency as well as adaptability in development, procurement and production. Across Japan, Toyota’s sales expertise and infrastructure will be shared by both to strengthen Daihatsu’s branding and profitability at that.

“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,” said Akio Toyoda, president of Toyota.

“I believe we have now found a course of action that will enable us to continue our growth for the next 100 years. We see this as the perfect opportunity to cement our relationship with Toyota and, by doing so, to embark on a new period of growth and to elevate the Daihatsu brand to a global standard,” said Masanori Mitsui, president of Daihatsu.