Toyota and Suzuki are to strengthen their technology alliance and take small stakes in each other.

Toyota plans to acquire 24,000,000 shares of common stock in Suzuki which is 4.94% ownership of the total number of shares issued by Suzuki as of March 31, 2019 (excluding treasury shares) with a total value of 96 billion yen (which is about 0.2% of Toyota’s market capitalisation).

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Suzuki plans to acquire, through purchase in the market, shares in Toyota equivalent to 48 billion yen.

The move reflects the increasing need by automakers around the world to share the cost of developing new technologies such as alternative fuels including electric/hybrid vehicles, autonomous driving and connected services.

Toyota announced in June it is planning for half of its global vehicle production to be either electric or hybrid vehicles by 2025, while Suzuki in particular has been struggling to keep pace with technology developments in the automotive industry.

The companies said the share acquisitions will be implemented after the companies obtain approvals from the foreign competition authorities.

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The two companies began considering business partnership in 2016, and since then have continued to consider specific details. In March, the companies announced that they would begin specific considerations in order to engage in joint product development and collaboration in production, in addition to promoting the mutual supply of products, by bringing together Toyota’s strength in electrification technologies and Suzuki’s strength in technologies for compact vehicles.

See also: Toyota and Suzuki to share models and hybrid technology