Tokyo – Japanese automotive and technology giant Mitsubishi Corp. has become the largest shareholder in Toyo Tire & Rubber Co. Ltd.
In a 1 Nov statement, Toyo said it had issued new shares to Mitsubishi to raise its stake in the company from 3.05% to 20.00%.
As part of the deal Mitsubishi has acquired more than 26.9 million shares of Toyo’s common stock, for a total value of Yen50.9 billion (€394 million).
The move, said the company, is in response to “intense competition within the tire industry and drastic environmental changes globally”.
With the so-called “alliance”, Toyo expects to collaborate with Mitsubishi to build a medium- and long-term business model to create additional value.
“We will use the capital raised… to meet the future challenges of a mobile society by investing in our global operations,” Toyo added.
As part of the alliance, Toyo Tire and Mitsubishi have agreed to collaborate in reinforcing their sales capabilities and resources as well as enhancing technological capabilities.
In terms of sales, Toyo plans to establish a joint task force with Mitsubishi in each region of Japan, China, Europe, Middle East, Africa and Asia, and leverage Mitsubishi’s sales channels to improve its marketing capabilities.
The two companies, in terms of technological collaboration, will work on future mobility, including conducting research on ‘next-generation materials’ such as new “features rubbers” and renewable materials.
Additionally, advanced development of production technologies such as "new features vulcanisers and rubber kneading machines" as well as the application of AI/IoT technologies in factory automation are on the list for technological collaboration.
“We also plan to extensively utilise the Mitsubishi group’s network, to drive advanced research, development of materials and technologies; streamline the procurement of raw materials; and build a new business model,” Toyo added.
The Japanese tiremaker, which is set to change its corporate name to “Toyo Tire Corp.” as of 2019, said the move is part of its new corporate philosophy which aims to “create excitement and surprise with our products that exceed customer expectations and enriches society.”
The company started its cooperation with Mitsubishi in Australian in 1974 and has since established a number of tire sales JVs with the company in Europe, China, Canada and Russia.
“Mitsubishi has been a vital partner in the worldwide expansion of the Toyo Tire brand,” the company has maintained.