Toyota, Suzuki Expand Partnership

Toyota Motor Corp. and Suzuki Motor Corp. have agreed to buy small equity stakes in each other as part of the expanding partnership between the Japanese carmakers.

Under the deal, Toyota will pay 96 billion yen ($910 million) for a 5% stake in Suzuki. The smaller carmaker will invest 48 billion yen ($450 million) to gain a 0.2% stake in Toyota.

The Japanese carmakers have been exploring potential partnerships for several years. Earlier this year they agreed to share compact car models and electrified vehicles in Europe and India.

Sharing products and technologies increases economies of scale and spreads development costs. The partnership also will allow each company to continue to specialize in what it does well, with Suzuki taking the lead on entry-level models while Toyota provides its expertise on hybrid systems and other advanced technologies.

The companies also plan to collaborate in emerging technologies and services, including autonomous vehicle systems.

Toyota has a similar equity relationship with Mazda Motor Corp., with which it is partnering on a new vehicle assembly plant in Alabama. The facility will begin making Corolla sedans and a new Mazda crossover vehicle in 2021.

Suzuki has been looking for a partner since its split from Volkswagen AG in 2015. That relationship failed to complete a single project.