Toyota, Suzuki deny reports of tie-up talks

Japanese automakers Toyota Motor and Suzuki Motor today denied discussing a potential partnership which could include a global tie-up after a newspaper report claimed they were in talks.

According to a report by Nikkei business daily, Suzuki, Japan's fourth-largest automobile company, and Toyota which is a global top-seller, were in talks for a possible partnership which included various angles such as a cross-shareholding deal.

This has prompted both Suzuki and Toyota to issue statements denying the report that they have entered negotiations over a possible tie-up.

The shares of Suzuki climbed 10 per cent in morning trade today, while Toyota's shares were up 3.6 per cent.

The report further said that Toyota was planning to turn Suzuki's main domestic competitor Daihatsu Motor Co into a wholly-owned subsidiary through an equity swap. Toyota owns 51.2 per cent of Diahatsu.

According to a Reuters report, Toyota and Daihatsu have made statements about the group considering various options which include turning Daihatsu into a wholly owned unit.

With an eye to capitalise on the demand for compact cars in India and other emerging markets Toyota and Suzuki are looking to take advantage by using each other's knowledge, said the Nikkei report.

While Suzuki is the top-selling car maker in India which specialises in small cars, the company has been under pressure to find a bigger partner to develop next-generation fuel-saving technology with governments tightening the emission norms.

Suzuki earlier had formed an alliance with Volkswagen in 2010, which eventually ended with a dispute last year.