cars news 10: Toyota Buys Out Daihatsu in Bid to Improve Small Cars

Toyota will fully buy out Daihatsu as part of a plan to strengthen its small car offerings, the automaker announced today.

Currently, Toyota owns a 51.2-percent stake in Daihatsu, a maker of mini-vehicles for emerging markets. Toyota estimates it will own the remaining shares of Daihatsu by this August.

“I have frequently worried that we haven’t managed to make our presence felt in the small car segment,” Toyota President Akio Toyoda told the media. “Unless we gain the know-how necessary to better develop small cars, we may deprive ourselves of the chance to make crucial breakthroughs.”

Under the agreement, Daihatsu will take the lead in developing small car products for both brands. It will also contribute its expertise in cutting costs and enhancing efficiency in the production process.

“I hope that this shared strategy will create a synergistic effect that benefits both Toyota and Daihatsu customers, whereby we can bring cutting-edge technologies to market in small cars and minivehicles earlier and more affordably,” said Daihatsu President Masanori Mitsui.

It’s unclear how Toyota’s complete ownership of Daihatsu will affect small cars in the U.S. market. Currently, the Scion iA small sedan and Canadian-market Yaris are rebadged versions of the Mazda2, both built at Mazda’s plant in Mexico.

Daihatsu’s brief stint in the U.S. ended in 1992. For a few years, it sold the Charade car and the Rocky compact SUV. The company currently manufactures small cars for Toyota in global markets.

Source: Toyota