Toyota plans Daihatsu buyout, says Suzuki purchase off the cards

Toyota has announced that it is considering purchasing Daihatsu in a deal that could be worth more than $4.4 billion.

Toyota already own a majority 51.2 per cent shareholding in Daihatsu but, according to industry newswire Automotive News, full control of the small-car maker would help the company become more profitable and sell more cars.

As well as the Daihatsu purchase, Toyota was forced to publicly deny rumours it was also planning to snap up Suzuki to help it conquer merging markets like India, where half of all new cars sold are Suzuki-badged.

The potential purchase of Suzuki, as well as Daihatsu, has confused many industry commentators in recent months, because even part-ownership of Suzuki would be a conflict with its existing share in the brand’s direct rival, Daihatsu.

Despite the public denial that Toyota is interested in Suzuki, shares of Suzuki on the Japanese stock market rose sharply by 11 per cent during trading as investors ignored the public rebuttal and rumours continued that Toyota was eyeing up an arrangement with Suzuki that would give it access to Maruti Suzuki India’s vast distribution network in India.

Daihatsu shares, meanwhile, also soared 16 per cent after a disappointing 2015 that saw total global sales slump 13.3 per cent.

If Toyota does buy the struggling Daihatsu outright, lower costs and healthier profit margins could finally make it financially viable in markets like Australia, where its models haven’t been on sale since 2006.