Toyota Acquires Daihatsu With Expansion Plans In South Asia

Toyota wishes to offer compact cars in emerging countries via Daihatsu

Toyota Motor Corp. has decided to up its game as it increases its bet against the automotive giants such as Volkswagen and others. During the start of this week, the Japan based automaker has continued with its victorious legacy from the previous year where it has been bragging about being the biggest automotive giant across the globe four times in a row. Along with that, the company is striving hard to continue its leadership especially in the South Asian side of the world.

The automotive giant is already the owner of 51% stake in Daihatsu Motor and is now all set to acquire the company. This will be an all stock deal accumulating to $3.2 billion. Toyota Motors has plans to give 26 cents for every Daihatsu stock at the present stock price barrier. This will result in almost 0.6% premium on the deal.

The company would device its strategy which will help them to bolster the mini car business in Japan along with targeting the compact car market in Indonesia and Malaysia. Daihatsu is extremely popular amongst the emerging market across the globe so now it seems that the company wishes to attract a new audience segment.

Daihatsu will now be operational as a business unit fully owned by Toyota which an aim to penetrate deeper in the small car business predominantly targeting its home ground Japan, Indonesia and Malaysia. It needs to be noted that Ford Motor Company has plans to leave Japan and Indonesia so by acquiring Daihatsu, the company will have the opportunity to push sales by taking over the market of Fords.

It is important to develop better relations with other automotive giants considering the accelerating input costs along with the expenses on research and development in the worldwide auto fraternity to comply with the industry demands.

It now seems that Toyota wishes to pave its way in the automotive segment where initially it was not doing as well as its competitors. Irrespective of the fact that the global sales have been very slow in the automotive industry the company now wishes to target a new audience who prefer small cars. There is a big market for such cars in the emerging countries and Daihatsu is already popular there.

“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,” stated Akio Toyoda, Toyota President, in a press release.