Toyota and Suzuki have announced an agreement built around a capital alliance as the two firms look to “establish and promote a long-term partnership”.

The Japanese companies say they are seeking to collaborate in “new fields, including the field of autonomous driving”.

The news is the latest in a string of joint announcements that kicked off when the two Japanese automakers signed a memorandum of understanding back in February 2017.

But this latest agreement will see the automakers acquire shares in each other. So, Toyota plans to acquire 24 000 000 shares of common stock in Suzuki (that’s 4,94 percent of the total number of shares issued by Suzuki as of March 31, 2019, excluding treasury shares) with a total value of ¥96-billion (about R13,9-billion) by underwriting the disposition of treasury shares by way of third-party allotment conducted by Suzuki.

Likewise, Suzuki plans to acquire, through purchase in the market, shares in Toyota equivalent to ¥48-billion (around R6,9-billion). These share acquisitions, say the firms, will be implemented after the companies obtain “approvals from the foreign competition authorities”.

“The automobile sector is currently experiencing a turning point unprecedented in both scope and scale, not only because of enhanced environmental regulations, but also from new entries from distinct industries and diversified mobility businesses,” the joint statement said.

“The two companies intend to achieve sustainable growth, by overcoming new challenges surrounding the automobile sector by building and deepening co-operative relationships in new fields while continuing to be competitors, in addition to strengthening the technologies and products in which each company specialises and their existing business foundations.”