Toyota to Buy Daihatsu for $3.2 Billion: What This Means for You
Micro machines might be about to make one hell of a comeback, guys, and while they may be a bit bigger than you remember, chances are that the turbo-powered minicars seen here might be more appropriate for you than previously predicted. In a public statement heralding from Japan the other day, Toyota admitted that last autumn Daihatsu president Masanori Mitsui sat down to entertain acquisition offers from the much larger Japanese firm. Most people may not know this, but Toyota and Daihatsu already have a longstanding relationship in place, which dates all the way back to 1967. So this news might be just what both companies need, and if our micro car predictions are correct, it’s something that young American buyers will want as well.
Over the past 50 years the two companies worked together on a multitude of projects, and now it seems the time has come for a new venture to unfold. This move could prove to reward America with all kinds of quirky cars in forthcoming years, and while they may not be the most masculine, muscle-bound machines on the planet, there is a market for them, and it’s one that continues to grow over here in the land of Cheez Whiz and Copenhagen chewing tobacco.
Toyota said it wants to transform Daihatsu from a maker of small cars into a brand similar to MINI, with the Japanese giant serving in place of BMW. Reportedly coughing up a staggering $3.2 billion in stock in order to make it a wholly owned Toyota subsidiary, company president Akio Toyoda assured us that while the acquisition was moving forward, the Daihatsu brand will never disappear.
Last year Toyota announced that it would extend collaborations with Mazda based on the success of vehicles like the efficient Scion iA sedan, a move that some deem wise considering the company’s slow global growth rate and the ever increasing cost of environmental fees. Toyota also has a sordid past when it comes to automotive alliances, with the failed partnership with Tesla serving as one such example. But this shouldn’t be the case for Daihatsu due to the two companies’ successful history of working together, a topic which we will get to shortly.
According to reports released by both companies, Daihatsu will stop trading on July 26 and then de-list the following day. Then, in order to acquire the remainder of the 51%-owned affiliate, Toyota plans to offer a 0.26 share for each share of Daihatsu in an open exchange of stock on August 1, 2016. Once this is complete, Toyota will then begin working on a global plan for the Daihatsu offshoot, and if all goes well, we Americans might end up being the ones who benefit from this merger.
“I have frequently worried that we haven’t managed to make our presence felt in the small car segment.” says Toyota president Akio Toyoda. “Unless we gain the know-how necessary to better develop small cars, we may deprive ourselves of the chance to make crucial breakthroughs. Furthermore, Daihatsu has the benefit of a spontaneous and independent nature. It’s the best kind of honest, unpretentious company, with a culture of being down to Earth and respecting the work done on the front lines. I believe they may be in possession of something that Toyota has lost sight of. I truly feel that we have a lot to learn from them.”
While these words are indeed humbling to hear from such a prominent man, last year was an abysmal one for Daihatsu, with worldwide sales slumping 13% to 794,000 vehicles total. Japan’s minicar leader also saw domestic deliveries decline 14% after a price war with Suzuki spiraled out of control toward the remainder of the fiscal year, a problem that Toyota’s financial backing can easily alleviate. These minicars, or “Kei cars” as they’re commonly referred to in Japan, are sold almost exclusively to the domestic Japanese market and to this day remain the most popular style of vehicle sold across all of its islands.
But Toyota wants to move Daihatsu into new territories, which is where we come in because while the majority of Daihatsu’s marketing dollars will surely remain in Japan, Toyota’s goal to make the brand a MINI competitor on a global scale could warrant some interesting results. Millennial Americans and Generation Z shoppers are rapidly becoming the largest target market for automakers, and with the majority of these younger buyers migrating toward urban centers, the need for economical, small-footprint vehicles with environmentally sound undertones are on the rise like never before.
Cheap to insure, inexpensive to buy and own, and surprisingly spacious despite their slight stature, the Kei car is rapidly becoming something that makes sense for the American market, and with a little bit of luck, they may end up coming our way. Hell, we’re already buying 1.0-liter turbocharged Fords, so why not a cool little Daihatsu or something re-branded as a Scion? Plus, cars like the Copen roadster look like absolutely fantastic little rocket ships, and we’d love to wind up with another fun little Mazda MX-5 fighter on our hands.