President Akio Toyoda at an annual shareholders meeting announced that Toyota Motor Corporation, the second biggest automaker in the world is considering mergers and acquisitions to obtain new automotive technologies. Akio stated that as automotive industry is undergoing major changes Toyota will focus on preserving the areas of strength.
Toyota Motor Corp has been investing US$ 9.08 billion every year for research and development, buying back shares and expanding capital expenditure. The company is now considering options of mergers and acquisitions. As the line between automotive and technological companies blur, the automakers are trying to expand their roles to offer transportation service providers than a simple automotive.
Key Reasons for Strategic Partnership
Investing US$ 1 billion in an artificial intelligence institute, Toyota has entered into technological partnership with Microsoft Corp and Uber technologies. In an attempt to obtain more software for its automated driving systems, Toyota Motor Corp has opened up to more companies for strategic collaborations and partnerships including the technological company Nvidia Corp. Through strategic partnership with technological companies, Toyota Motor Corp plans to incorporate new automotive technologies such as self-driving technologies and electrical vehicles (EVs) to compete aggressively against rivals. Toyota Motor Corp will be launching a car that can drive itself on the highways by the year 2020.
Striving to obtain a competitive edge, Toyota Motor Corp has further opened to companies beyond group suppliers and rivals such as Nissan Motor Co, which is aiming to launch independent, self-driving cars by 2020. Whereas, General Motors Co stated that it has initiated the mass production of self-driving automotive.
Status Quo in the Competitive World
Automotive companies such as GM has significantly contributed to the autonomous driving technology company Cruise based in the U.S. It has further entered into partnership with Lyft that provides ride services. Additionally, Ford Motor Co has recently acquired Chariot, which offers ride sharing services. However, Toyota Motor Corp is yet to sign a major capital association with companies that are based outside.
The president of Toyota Motor Corps announced at the annual shareholders meeting, that the company was open to strategic partnerships and mergers with other companies unlike previously. Toyota Motor Corp had set up an electric car division in 2016, and now plans to launch an autonomous driving car by 2020 after collaborating various driving technology in its range of automotive. Belatedly, Toyota Motor Corp announced its plan to enter the market where automotive companies such as GM, Volkswagen AG and Nissan among other automakers have already initiated their mass production of autonomous driving cars. Moreover, other automakers that are planning to launch the autonomous driving vehicles that will provide features such as hydrogen fuel cell vehicles aiming for the zero-emission car of the future.