TOKYO - In direct contrast to an auto industry trend, the five biggest Toyota Group member companies continued to tighten their shareholdings in one another in the justcompleted fiscal year.
According to figures released by the companies - Toyota Motor Corp. and four major suppliers - the increases were small. But they continued a gradual, steady tightening of equity ties that has occurred over the past several years.
By doing so, Toyota is ensuring its key suppliers are on the same level with it in terms of values and goals, said Stephen Usher, Tokyo-based auto analyst for Jardine Fleming Securities (Asia) Ltd.
Toyota has 'a clear idea of where they want to go, and they want to make sure everyone is there with them,' he said.
In essence, he said, Toyota disagrees with the global trend of automakers putting more distance between themselves and their suppliers, as epitomized by the spinoff of Delphi Automotive Systems Corp. from General Motors and Visteon Corp. from Ford Motor Co.
The move also contrasts with efforts by other Japanese automakers to break up long-established supplier networks held together by equity ties.
'Toyota has a fairly aggressive medium-term plan that involves financial services, telecoms and a number of new technologies. It recognizes that while it has pretty vast financial resources, success in implementing this plan is going to be cross-disciplinary and is going to involve significant resources' beyond what it has alone, Usher said.
In the past fiscal year, Toyota has increased its shareholding in four companies.
They were electronics specialist Denso Corp.; Toyoda Automatic Loom Works Ltd., the founding member of the Toyota Group, which now assembles vehicles and makes engines for Toyota; Toyoda Gosei Co., which makes plastic and rubber parts; and Aisin Seiki Co., which makes powertrain parts.
In addition, Denso and Toyoda Automatic Loom Works raised their stakes in each other.
'It's not a defensive move, although they would like you to think so,' Usher added.
'Nobody is going to buy Denso, Aisin (Seiki), or (Toyoda) Automatic Loom without the wholehearted approval of Toyota. So it's difficult to accept that (defensive) explanation,' Usher said.
In contrast, Nissan Motor Co. has decided to sell its stakes in all but four of its core affiliates.
Two of the four are vehicle assemblers Aichi Machine Industry Co. and Nissan Shatai Co. Nissan officials have refused to identify the other two.
Mazda Motor Corp. has decided to sell stakes in some of its affiliates, including those of companies in such unrelated businesses as concrete pilings.