Toyota and Subaru Escalate Technology Sharing

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It’s been 14 years since Toyota and Subaru first joined forces, and now they’re tightening their embrace.

  • Toyota is deepening its financial ties with Subaru and, in the process, committing to build the next-generation Toyota 86 and Subaru BRZ sports cars.
  • Toyoata has been launching or expanding ties with other competitors, including Suzuki, Mazda and BMW.
  • These alliance could help each of the automakers bring more products and new technologies to market

Toyota is investing around $700 million to increase its stake in the smaller Japanese automaker from 17 to 20%, while Subaru is itself making a small investment in its traditional rival. “During this once-in-a-century period of profound transformation, driving enjoyment will remain an inherent part of automobiles and is something that I think we must continue to strongly preserve,” said Toyota CEO Akio Toyoda.

The two carmakers also plan to work together to develop new all-wheel-drive models, leveraging one of Subaru’s traditional strengths. Toyota could wind up accessing some of Subaru’s boxer engines, according to industry observers and they’re expected to work together on driver assistance systems, such as Subaru’s EyeSight technology.

Toyota brought the Supra back to life as part of an alliance with BMW. (Photo: Paul A. Eisenstein,

A genuine win-win

Subaru, the smaller of the two Japanese automakers, has been a laggard in the development of electrified vehicles and could draw from Toyota’s long history with hybrids. Toyota, however, has been slow to move beyond conventional hybrids, so the partnership is expected to work on future plug-ins and all-electric models. Toyota has pledged to sell millions of electric vehicles in the next few years. Subaru could also access Toyota’s hydrogen technology used in its Mirai fuel-cell vehicle.

From a business perspective, the deal provides a deep-pocket partner for Subaru while also letting Toyota count some of the smaller company’s sales and earnings as its own. That could allow Toyota, which sold 10.6 million vehicles last year, regain its crown as the world’s best-selling automaker in a tight race with Volkswagen AG and the Renault-Nissan-Mitsubishi Alliance.

Expanding ties with Subaru came as no surprise to some analysts. It “is part of Toyota’s recent efforts to find allies,” Tatsuo Yoshida, auto analyst at Bloomberg Intelligence said. “They’re getting ready for the next era that includes self-driving technology. Toyota is taking a 360-degree view.”

Traditionally, Toyota took a go-it-alone approach, even as other major manufacturers like General Motors, Nissan and Volkswagen either launched partnerships with, or outright acquired, competitors. But that has changed since CEO Akio Toyoda came onboard.

In 2016, the industry giant spent $3 billion to acquire the remaining stake in minicar company Daihatsu, one of the few competitors it had teamed up with before Toyoda was named CEO.

Toyota press conference
Toyota joined in with Denso and SoftBank to expand its investment in ride-sharing giant Uber earlier this year. (Photo: Toyota)

More partnerships

Just a month ago, Toyota revealed it was acquiring a 4.94% stake in Suzuki for $910 million. In turn, the smaller automaker said it would purchase 0.2% of Toyota’s outstanding shares for about $455 million. Toyota also holds a 5% stake in Mazda, while the Hiroshima-based automaker has a 0.25% holding in the bigger company. That alliance was formed in August 2017 and helped Mazda find a deep-pocket partner after having lost the help of long-time ally Ford.

The deals with Mazda and Suzuki will play out in a number of ways, including the development of new small car lines, as well as a push into battery-electric vehicles. Mazda and Toyota also are setting up a new jointly operated assembly line in Alabama.

Toyota’s newfound interest in alliances also has seen it invest $500 million in ride-share giant Uber, a move meant to help both develop autonomous and fully driverless vehicles. And another deal with BMW helped justify the cost of bringing two low-volume sports cars to market, the next-generation BMW Z4 and the reborn Toyota Supra.


While it may be one of the most successful automakers in the world, even Toyota has limited resources. By teaming up with an array of new partners, the Japanese giant hopes to justify the cost of bringing new electric and autonomous vehicles to market faster than would have been possible on its own.

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