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Toyota to Collaborate With Subaru to Develop 86 and BRZ Cars

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In a bid to develop latest technologies and gain economies of scale, Toyota Motor Corporation (TM - Free Report) and Subaru Corporation have expanded the partnership. The companies will work to develop electric vehicles and driverless cars. The alliance is likely to aid the companies to create second-generation Toyota 86 and Subaru BRZ.

Apart from this, with the collaboration, Toyota will acquire a larger stake in Subaru.

To strengthen ties with Subaru, Toyota intends to increase its stake in the latter from 16.83% to 20%. The move will expand Toyota’s voting rights, with Subaru becoming an affiliated company. The deal will give Subaru the right to expand its use of Toyota hybrid technology beyond Crosstrek Hybrid.

The collaboration is aimed at developing electric vehicles, which will combine Toyota’s electrification tech with Subaru’s all-wheel drive hardware. The companies intend to make better cars suitable for CASE (connected, autonomous, shared and electric) era.

Widespread usage of technology and rapid digitalization are resulting in fundamental restructuring of the automotive market. A shift toward electric and self-driving vehicles has made it necessary for industry players to reorient their business models. These collaborations are helping carmakers to benefit from economies of scale, reduction in overhead costs and acceleration in the development of technologies.

Some other auto bigwigs like General Motors (GM - Free Report) , Honda, Ford (F - Free Report) , Volkswagen, BMW and Daimler AG (DDAIF - Free Report) are also engaged in such tie-ups, which aid them to unlock synergies and place better in the evolving automotive market.

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