It was way back in October 2016 when Toyota and Suzuki signed an agreement to expand their business partnership. It was then followed by a string of collaborations and cross supply of cars in India.

Now, the two Japanese automakers have agreed to enter into a 'capital alliance' in order to establish a long-term partnership in various fields, including autonomous driving. Under the alliance, Toyota plans to acquire 24,000,000 shares of common stock in Suzuki (equates to 4.94% ownership or JPY 96 billion). Meanwhile, Suzuki is looking to buy shares in Toyota equivalent to 0.2% ownership (about 48 JPY billion).

Toyota and Suzuki buy stakes in each other image

According to both Toyota and Suzuki, the purpose of the capital alliance is to achive sustainable growth. This will be done via the building and deepening of ties in automotive and other fields while still remaining competitors. In addition, the alliance will also complement each of the brand's technologies and products.

But how exactly will these two benefit from one another, you may ask? Well for starters, Suzuki specializes in making small cars. From hatchbacks to mini MPVs, as well as crossovers and 4x4s, Suzuki knows a thing or two in making small vehicles. Toyota is also no stranger in making miniature vehicles, but their expertise lies in hybrid and powertrain technologies.

In fact, just last March, the two automakers have agreed to supply and help one another. Toyota will be supplying hybrid tech and powertrains for Suzuki to use globally. Moreover, Toyota will also be providing Suzuki with two new hybrid vehicles based on the RAV4 and Corolla Wagon for Suzuki to sell in Europe.

Toyota and Suzuki buy stakes in each other image

In return, Suzuki will be producing two new compact vehicles for Toyota in India. The new models will be based off the Ciaz and Ertiga and will be rebadged under the Toyota brand in the Indian market. Toyota is also set to receive engines from Suzuki that can be used for compact vehicles that will be sold in Europe. Finally, Toyota will also be rebadging the Baleno, Vitara, Brezza, Ciaz, and Ertiga in Africa.

With the new capital alliance in play, expect to see more collaborations between the two automakers in the coming years.