Toyota Buys Stake in Fuji Heavy From GM
10-05-2005, 11:54 AM
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Toyota Buys Stake in Fuji Heavy From GM
TOKYO - Toyota Motor Corp. has agreed to buy an 8.7 percent stake in rival Japanese automaker Fuji Heavy Industries, the maker of Subaru cars, from General Motors Corp. for about $315 million, officials from the companies said Wednesday.
GM, the world's biggest automaker, also plans to sell its remaining 11.4 percent Fuji stake and dissolve its alliance with Fuji, the companies said. GM said "there were not enough collaborative projects" to sustain the alliance and that it planned to find other partners and markets in the Asia Pacific region for its resources.
Once GM's sales are completed, Toyota, Japan's biggest automaker, will be the top shareholder in Fuji.
The sales come in the wake of the U.S. automaker's losses of $1.1 billion in the first quarter and another $286 million in the second quarter.
But Toyota Executive Vice President Mitsuo Kino****a denied the move was a bailout for GM.
"We absolutely do not have help for GM in mind," he told reporters at a Tokyo hotel, where he appeared with Fuji Heavy President Kyoji Takenaka to announce a new alliance between the Japanese automakers.
Toyota Chairman Hiroshi Okuda had expressed worries lately about a possible political backlash from U.S. automakers because of Toyota's bright results at a time when GM and Ford Motor Co. are faltering. Toyota's Kino****a said GM and Toyota have been talking about the stock sale for several months.
Tsuyoshi Mochimaru, auto analyst with Deutsche Securities in Tokyo, said the benefits for Toyota in the deal were still unclear but the move showed that GM and Fuji both saw that their alliance wasn't bearing fruit.
"In that sense, GM's alliance efforts with Fuji failed," he said. "But it will take time to assess whether synergies can grow between Fuji and Toyota."
Access to Fuji's plants could be a way for Toyota to raise its production capability at a time when its sales are on a roll, but Mochimaru said Fuji, a relatively niche market player, only runs one plant in North America and is unlikely to deliver much of a boost in production for Toyota.
Toyota is paying 520 yen ($4.60) a share for the roughly 68 million Fuji shares it is buying from GM. That is below the closing price for Fuji shares of 540 yen ($4.70) on Wednesday before the deal was announced.
The price of GM's remaining 89 million shares will be determined in the marketplace as GM offers the shares back to Fuji as part of Fuji's open-market share buyback program and through market sales. That stake was worth about $418 million at Wednesday's closing Fuji price.
Toyota and Fuji, meanwhile, are starting talks to agree on future collaboration soon, they said. Possibilities are in working together in product development and production, although nothing has been decided, Kino****a said. Access to Fuji's plants could be a way for Toyota to raise production capabilities at a time when its sales are on a roll.
Detroit-based GM also owns stakes in Japanese automakers Isuzu Motors, a truck maker, and Suzuki Motor Corp., which makes small cars.
"We've had a good partnership; however both GM and FHI came to the conclusion that there were not enough collaborative projects to sustain the alliance and that each of our interests could be better served through a different approach," said Troy Clarke, GM group vice president and president, GM Asia Pacific. Clarke resigned as Fuji's director of the board Wednesday.
Since GM acquired a stake in Fuji in 2000, the companies have been working together in product development, advanced technology and global purchasing. GM will continue work with Fuji on one production vehicle, the Saab 9-2x, GM said. But other projects will end, including the joint development of a crossover vehicle, announced last year.
Also Wednesday, Fuji revised its profit outlook for the fiscal year ending March 31, 2006, to 12 billion yen ($105 million), down from the earlier forecast for 15 billion yen ($131 million), to account for an unfavorable exchange rate and lack of sales momentum.
GM and Toyota have a long-standing partnership to share environmental technology, and they run a car assembly plant in California together, although the ties do not involve holding stakes in each other.
Out of concern for GM's plight, Okuda has recently suggested Toyota raise the price of car models in the United States. Toyota raised prices soon after, but denied the move was to placate U.S. automakers.
In May, Toyota reported its best ever fiscal year profit of 1.17 trillion yen ($10.3 billion) as sales grew in North America, Europe, Japan and the rest of Asia.
Toyota, based in central Japan's Toyota city, holds stakes in two other Japanese automakers, Daihatsu Motor Co., which makes small cars, and Hino Motors, which makes trucks.
Toyota shares, which have held steady over the past year but gradually rose since May, edged down nearly 1 percent to close at 5,250 yen ($46) before the deal was announced.
By YURI KAGEYAMA, AP Business Writer
GM, the world's biggest automaker, also plans to sell its remaining 11.4 percent Fuji stake and dissolve its alliance with Fuji, the companies said. GM said "there were not enough collaborative projects" to sustain the alliance and that it planned to find other partners and markets in the Asia Pacific region for its resources.
Once GM's sales are completed, Toyota, Japan's biggest automaker, will be the top shareholder in Fuji.
The sales come in the wake of the U.S. automaker's losses of $1.1 billion in the first quarter and another $286 million in the second quarter.
But Toyota Executive Vice President Mitsuo Kino****a denied the move was a bailout for GM.
"We absolutely do not have help for GM in mind," he told reporters at a Tokyo hotel, where he appeared with Fuji Heavy President Kyoji Takenaka to announce a new alliance between the Japanese automakers.
Toyota Chairman Hiroshi Okuda had expressed worries lately about a possible political backlash from U.S. automakers because of Toyota's bright results at a time when GM and Ford Motor Co. are faltering. Toyota's Kino****a said GM and Toyota have been talking about the stock sale for several months.
Tsuyoshi Mochimaru, auto analyst with Deutsche Securities in Tokyo, said the benefits for Toyota in the deal were still unclear but the move showed that GM and Fuji both saw that their alliance wasn't bearing fruit.
"In that sense, GM's alliance efforts with Fuji failed," he said. "But it will take time to assess whether synergies can grow between Fuji and Toyota."
Access to Fuji's plants could be a way for Toyota to raise its production capability at a time when its sales are on a roll, but Mochimaru said Fuji, a relatively niche market player, only runs one plant in North America and is unlikely to deliver much of a boost in production for Toyota.
Toyota is paying 520 yen ($4.60) a share for the roughly 68 million Fuji shares it is buying from GM. That is below the closing price for Fuji shares of 540 yen ($4.70) on Wednesday before the deal was announced.
The price of GM's remaining 89 million shares will be determined in the marketplace as GM offers the shares back to Fuji as part of Fuji's open-market share buyback program and through market sales. That stake was worth about $418 million at Wednesday's closing Fuji price.
Toyota and Fuji, meanwhile, are starting talks to agree on future collaboration soon, they said. Possibilities are in working together in product development and production, although nothing has been decided, Kino****a said. Access to Fuji's plants could be a way for Toyota to raise production capabilities at a time when its sales are on a roll.
Detroit-based GM also owns stakes in Japanese automakers Isuzu Motors, a truck maker, and Suzuki Motor Corp., which makes small cars.
"We've had a good partnership; however both GM and FHI came to the conclusion that there were not enough collaborative projects to sustain the alliance and that each of our interests could be better served through a different approach," said Troy Clarke, GM group vice president and president, GM Asia Pacific. Clarke resigned as Fuji's director of the board Wednesday.
Since GM acquired a stake in Fuji in 2000, the companies have been working together in product development, advanced technology and global purchasing. GM will continue work with Fuji on one production vehicle, the Saab 9-2x, GM said. But other projects will end, including the joint development of a crossover vehicle, announced last year.
Also Wednesday, Fuji revised its profit outlook for the fiscal year ending March 31, 2006, to 12 billion yen ($105 million), down from the earlier forecast for 15 billion yen ($131 million), to account for an unfavorable exchange rate and lack of sales momentum.
GM and Toyota have a long-standing partnership to share environmental technology, and they run a car assembly plant in California together, although the ties do not involve holding stakes in each other.
Out of concern for GM's plight, Okuda has recently suggested Toyota raise the price of car models in the United States. Toyota raised prices soon after, but denied the move was to placate U.S. automakers.
In May, Toyota reported its best ever fiscal year profit of 1.17 trillion yen ($10.3 billion) as sales grew in North America, Europe, Japan and the rest of Asia.
Toyota, based in central Japan's Toyota city, holds stakes in two other Japanese automakers, Daihatsu Motor Co., which makes small cars, and Hino Motors, which makes trucks.
Toyota shares, which have held steady over the past year but gradually rose since May, edged down nearly 1 percent to close at 5,250 yen ($46) before the deal was announced.
By YURI KAGEYAMA, AP Business Writer
10-05-2005, 02:24 PM
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Well this should be interesting...they can make the next supra with Subaru's AWD system...ha ha ha yeah right.
Should be pretty cool to see what happens. Hopefully Subarus won't turn into Scion XBs.
Should be pretty cool to see what happens. Hopefully Subarus won't turn into Scion XBs.
10-06-2005, 09:53 AM
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Toyota is the second largest automaker in the world, Subaru is a very small blip on their radar. I don't expect much toyota/subaru transfer other than money going out of Subaru accounts and into Toyota. That is, if Subaru remains profitable. If they start losing money (B9 tribeca, anyone?) then it will be the other way around.
There goes the AWD cobalt that was being discussed. GM is stupid sometimes. They should have done more with Subaru while they had the chance. Instead, they're going to put all their eggs in one basket (again) and build a quadrillion SUV's with a nice profit margin, let them sit on dealer lots and have to offer huge incentives that give that profit margin away just to move the product.
There goes the AWD cobalt that was being discussed. GM is stupid sometimes. They should have done more with Subaru while they had the chance. Instead, they're going to put all their eggs in one basket (again) and build a quadrillion SUV's with a nice profit margin, let them sit on dealer lots and have to offer huge incentives that give that profit margin away just to move the product.
10-06-2005, 02:01 PM
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Originally Posted by Itazura
There goes the AWD cobalt that was being discussed. GM is stupid sometimes. They should have done more with Subaru while they had the chance..
my information may be a little off since i have been out of subaru as of Dec 04- but i think i hit it right-
like i have been saying in hiic and general, hybrid technology is definitely in subaru's sights.... definite positive outlook now. to marry toyota/subaru- makes the hybrid technology much more cost effective.. and less $$ spent on R&D and more spent on production and marketing of possible forester, tribeca($$) hybrids- or maybe even a impreza hybrid.
since my familiarity is with honda hybrids(since i sell em) i'm not sure how the boxer engine would marry with an integrated motor assist(IMA)... i think the "is there enough room?" issue to address....
aloha from the summit of *-^-Mauna Kea-^-*
10-06-2005, 06:14 PM
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IIRC the newest motor that Honda uses is a few (approx 3) in thick. That is not too long...
What about the return of Toyota to the WRC?
Will there be more small AWD cars from Toyota?
Will Toyota dilute Subaru's 'Subaru-ness'?
What about the return of Toyota to the WRC?
Will there be more small AWD cars from Toyota?
Will Toyota dilute Subaru's 'Subaru-ness'?
10-06-2005, 06:38 PM
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Originally Posted by gdogg
like i have been saying in hiic and general, hybrid technology is definitely in subaru's sights.... definite positive outlook now. to marry toyota/subaru- makes the hybrid technology much more cost effective.. and less $$ spent on R&D and more spent on production and marketing of possible forester, tribeca($$) hybrids- or maybe even a impreza hybrid.
since my familiarity is with honda hybrids(since i sell em) i'm not sure how the boxer engine would marry with an integrated motor assist(IMA)... i think the "is there enough room?" issue to address....
aloha from the summit of *-^-Mauna Kea-^-*
since my familiarity is with honda hybrids(since i sell em) i'm not sure how the boxer engine would marry with an integrated motor assist(IMA)... i think the "is there enough room?" issue to address....
aloha from the summit of *-^-Mauna Kea-^-*
Feast yer eyes on THAT one. EJ20 hybrid, Miller cycle, IMA, et al. I really like the idea of using the IMA to fill in the dead bottom end of the miller cycle operation.
a hybrid might not be so bad after all...
I think you're 100% right that the Toyota marriage will be better for Subaru than what they had with GM, but I wish that GM had been on the ball and taken advantage of the Subaru partnership when they had the chance. (remember the Borrego?)
Last edited by Itazura; 10-06-2005 at 06:42 PM.
10-07-2005, 06:56 AM
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A nearby dealer who sells both Ford and Subaru is rumored to want to set up a stand-alone Subaru dealership. Would that make sense now? My own suspicion is that Subaru will go the way of the Plymouth, the Oldsmobile and the Edsel.
10-07-2005, 02:55 PM
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Originally Posted by Itazura
http://www.greencarcongress.com/2005...eavys_tur.html
Feast yer eyes on THAT one. EJ20 hybrid, Miller cycle, IMA, et al. I really like the idea of using the IMA to fill in the dead bottom end of the miller cycle operation.
a hybrid might not be so bad after all...
I think you're 100% right that the Toyota marriage will be better for Subaru than what they had with GM, but I wish that GM had been on the ball and taken advantage of the Subaru partnership when they had the chance. (remember the Borrego?)
Feast yer eyes on THAT one. EJ20 hybrid, Miller cycle, IMA, et al. I really like the idea of using the IMA to fill in the dead bottom end of the miller cycle operation.
a hybrid might not be so bad after all...
I think you're 100% right that the Toyota marriage will be better for Subaru than what they had with GM, but I wish that GM had been on the ball and taken advantage of the Subaru partnership when they had the chance. (remember the Borrego?)
i'm excited to see just exactly what toyota is willing to share with subaru.... and what subaru has to offer toyota other than transmission technology- - -
aloha from the summit of *-^-Mauna Kea-^-*
10-07-2005, 03:00 PM
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Originally Posted by nypatrick
A nearby dealer who sells both Ford and Subaru is rumored to want to set up a stand-alone Subaru dealership. Would that make sense now? My own suspicion is that Subaru will go the way of the Plymouth, the Oldsmobile and the Edsel.
i have to disagree with your suspicions.... at least on a grand scale. as far as locally... i think subaru in your area depending on the strength of you local market... that should determine that stand alone dealership's lifespan....
aloha from the summit of *-^-Mauna Kea-^-*
10-07-2005, 04:52 PM
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I think Subaru is in pretty good shape for the most part, although there have been a few "dead" products over the last couple years. (Baja, Tribeca) They are also in EXCELLENT hands with Toyota. If Subaru can keep their good quality reputation and continue to improve their product line, I don't see any reason they would go away.
Hopefully, we'll get some styling help from Toyota and then dump that goofball from Alfa Romeo...
Hopefully, we'll get some styling help from Toyota and then dump that goofball from Alfa Romeo...