Subaru now officially joins Toyota Group after the latter increased its stake in the company from 16.8% to 20% considerably strengthening their ties. This development was first announced in September 2019. Toyota Group initially acquired stakes in Subaru in 2005. Toyota Group also has less than 10% stake in both Suzuki Motor Corp and Mazda Motor Corp.

Changing automotive landscape

This comes in the wake of the automotive industry, a 2.23 trillion dollar industry is at the verge of unprecedented change. The world is gearing up to a future of electric autonomous mobility, huge changes that have seen new entrants into the overly traditional automotive space, new companies such as Tesla and Byton, and technology companies such as Uber, Waymo and Lyft. Electric mobility pioneer Tesla has bet big on electric autonomous driving and has grown from a startup into a formidable player in the automotive space. These rapid developments have crept in on the traditional automakers and are proving to be an existential threat for some, given the huge costs associated with research, development and production of entirely new autonomous vehicles.

Toyota is one of the larger automakers looking to forge partnerships as it aims to secure its position in an uncertain future. Toyota is looking to invest in electric autonomous vehicles, fuel-cell and hybrid cars as data-intensive connected cars segment rapid growth continues to gather momentum. As part of this pact, these automakers are looking to future proof themselves and are planning to jointly develop all wheel drive vehicles, a traditional Subaru strength with its world renown Symmetrical All Wheel Drive system. The companies will also work together on the new Toyota 86 and Subaru BRZ sports cars.

“For Toyota, this alliance brings not only technologies such as Subaru’s Eyesight technology, Symmetrical All Wheel Drive and flat Boxer engines, but also security and know-how.” Yoshida said.

“In this once in a century period of profound transformation, by strengthening our bonds and aligning our capabilities, we endeavor to make even better cars, better than either company has been able to achieve thus far.” Subaru.

Big changes coming

Subaru is not expected to become a fully owned Toyota subsidiary, however this development means huge changes are in the offing for both companies. Subaru recently also announced that by 2030, it expects 40% of its global sales to be electric or hybrid models. Subaru is betting on Toyota’s hybrid technologies to be able to achieve this. Subaru and Toyota already launched an all new Subaru Crosstrek plug-in hybrid launched last year. Subaru also expects to use Toyota’s hybrid technology in more of its models including the Subaru Outback, Forester and Subaru Ascent models.