Posted on 30 Nov 2023
Japanese automaker Toyota has reportedly decided to sell a portion of its stake in its largest automotive component supplier Denso to secure more funds for its electric vehicle business and improve asset efficiency.
According to Nikkei Asia, Toyota Motor and its affiliations plan to sell about 10%, which is worth approximately JPY 700 billion ($4.7 billion), of the total shares in Denso. The idea is to free up funds for quicker EV investments.
Kallanish is yet to receive a response from Toyota and Denso.
Toyota Motor held about 24.2% of Denso’s total shares as of the end of September, while Toyota Industries owned 9% and Aisin had 2%.
For Toyota Motor alone, the holding stake is expected to be reduced to about 20%, returning JPY 300 billion in potential new funds. While maintaining the relationship of an equity method applicable company with part of its profits included in consolidated financial statements, its stake in Denso is thus reduced to the minimum required.
The Japanese auto giant is expected to lower its stake in other companies for the same purpose. The Nikkei says that if it lowers the stakes in other companies to the minimum 20% as well, about JPY 400 billion fund can be generated.
Last month, Toyota announced it will invest nearly $8 billion into its battery manufacturing plant in North Carolina, US, targeting 30 gigawatt-hours of total production by 2030. Start-up is planned by 2025.
Besides investing in plant electrification and battery manufacturing capacity, the carmaker is also focusing on developing new technologies to reduce costs and increase performance of its all-electric bZ4X model. Toyota is targeting sales of 3.5 million BEVs globally by 2030.
However, the company has recently cut its EV sales forecast this financial year by nearly 40% to 123,000 units. It said the move reflected the decline in the Chinese market and the intensifying EV price war in the country.
Source:Kallanish
