Denso Corporation has said a full buy out by Toyota Motor of its mini-vehicle subsidiary Daihatsu Motor was a chance for Japan’s largest supplier to expand its product range by making more parts for smaller vehicles.

Daihatsu, currently owned 51.2% by Toyota Motor Corporation, will become a wholly-owned subsidiary of TMC by way of a share exchange expected to be completed in August 2016, the pair announced last January.

Denso is Toyota’s largest supplier, and counts the automaker group as its biggest customer, a Reuters report noted.

In a recent interview with the news agency, Denso president and CEO Koji Arima said the buy out might result in the development of smaller cars with more specialised features, or an increase in Daihatsu branded vehicles which use Toyota technology.

“If this is the case, there could be opportunities for us to increase the range of parts we supply to both companies,” Arima said.

“For example, there could be an chance for us to develop parts for both mini-vehicles and compact cars. This would be a way for use to raise volumes and lower development costs.”

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Reuters noted that, in past years, Daihatsu, which makes smaller, lower-priced vehicles than Toyota largely for Japanese and Asian markets, has been sourcing more lower-cost parts from non-Toyota group suppliers to bring down its costs.

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