Does Toyota Own Subaru? A Comprehensive Look at Their Relationship

The automotive industry has witnessed numerous partnerships and collaborations over the years, with automakers joining forces to leverage each other’s strengths, cut costs, and stay competitive in an ever-evolving market. One such partnership that has piqued the interest of car enthusiasts and industry watchers alike is the one between Toyota and Subaru – two Japanese automotive giants with distinct identities and product lineups.

Does Toyota own Subaru? While the two companies have forged a close alliance, Toyota does not fully own Subaru. However, their relationship is multifaceted, with Toyota holding a significant ownership stake in Subaru and the two companies collaborating on various fronts, including vehicle development, production, and technology sharing.

Learn about the Toyota-Subaru partnership, including Toyota’s ownership stake, joint vehicle models, production efficiencies, technology sharing, and future plans. Discover how this alliance benefits both automakers and gives them a competitive edge.

Toyota’s Ownership Stake in Subaru

Toyota’s involvement with Subaru dates back to the mid-2000s when the former acquired a stake in the latter. As of 2023, Toyota owns approximately 20% of Subaru, making it the largest single shareholder in the company. This ownership stake was gradually built up over the years, starting with an initial acquisition of a small portion of Subaru’s shares in 2005.

It’s worth noting that the ownership isn’t a one-way street. Subaru, in turn, holds a minuscule stake of around 0.3% in Toyota. While this stake is negligible, it symbolizes the mutual commitment and interdependence between the two automakers.

Toyota’s substantial ownership stake in Subaru is unique compared to other major automaker partnerships or ownerships. For instance, while Volkswagen fully owns subsidiaries like Audi, Porsche, and Skoda, Toyota’s approach with Subaru is more akin to a strategic alliance, allowing Subaru to maintain its independent brand identity and operations while benefiting from Toyota’s resources and expertise.

Collaborative Vehicle Models and Platforms

One of the most visible fruits of the Toyota-Subaru partnership is the collaborative development of vehicle models and platforms. Two notable examples are the Subaru BRZ and Toyota 86 sports cars, as well as the more recent Toyota bZ4X and Subaru Solterra electric vehicles (EVs).

The Subaru BRZ and Toyota 86 are essentially the same car, with minor cosmetic and branding differences. These sporty coupes were jointly developed by the two companies, leveraging Subaru’s expertise in horizontally-opposed boxer engines and Toyota’s prowess in chassis engineering. The collaboration allowed both automakers to share development costs and offer an affordable, rear-wheel-drive sports car in their respective lineups.

More recently, Toyota and Subaru joined forces to develop the e-TNGA platform, a dedicated architecture for electric vehicles. This platform underpins the Toyota bZ4X and Subaru Solterra, which are essentially the same vehicle with minor differences in styling and branding. By co-developing the platform and sharing production facilities, both companies could reduce the substantial costs associated with developing and manufacturing EVs from the ground up.

Looking ahead, there are rumors of Toyota and Subaru collaborating on a three-row electric SUV, further solidifying their partnership in the burgeoning EV segment.

Production and Manufacturing Synergies

In addition to co-developing vehicle models, Toyota and Subaru have also established synergies in production and manufacturing. For instance, the Toyota bZ4X and Subaru Solterra EVs are being produced at Toyota’s Motomachi plant in Japan, allowing for efficient utilization of production resources.

Moreover, there are reports that Toyota plans to build a new three-row electric SUV for Subaru at its manufacturing facility in Georgetown, Kentucky, starting in 2025. This move not only exemplifies the depth of their partnership but also ensures that both the Toyota and Subaru versions of the SUV qualify for the $7,500 federal tax credit under the Inflation Reduction Act, as they will be assembled in the United States using locally sourced batteries.

By sharing production facilities and leveraging each other’s manufacturing expertise, Toyota and Subaru can achieve significant cost savings and economies of scale, ultimately benefiting both companies and their customers.

The Toyota-Subaru Partnership Origin

The roots of the Toyota-Subaru partnership can be traced back to the mid-2000s when General Motors (GM), which previously held a stake in Subaru (then known as Fuji Heavy Industries), sold off its shares. Toyota seized this opportunity and acquired a portion of these shares, kick-starting its involvement with Subaru.

Initially, the partnership was aimed at leveraging each company’s strengths to develop new models and technologies. Toyota, known for its expertise in hybrid and alternative powertrain technologies, could provide Subaru with access to these advancements, while Subaru’s prowess in building all-wheel-drive vehicles and boxer engines could benefit Toyota’s product lineup.

Over the years, the partnership evolved from a simple cross-shareholding arrangement to a more comprehensive collaboration spanning various aspects of the automotive business, including vehicle development, production, and technology sharing.

Despite the close ties, Subaru has remained an “independent” brand under Toyota’s wing, preserving its distinct identity and core values, such as a focus on all-wheel-drive capabilities, boxer engines, and a rugged, go-anywhere attitude.

Technological Sharing and Future Plans

One of the key benefits of the Toyota-Subaru partnership is the ability to share technological advancements and expertise. In the realm of electrification, Subaru has been leveraging Toyota’s hybrid technology to introduce electrified variants of its models, such as the Crosstrek Plug-in Hybrid.

Conversely, Toyota has incorporated Subaru’s renowned boxer engines into some of its vehicles, notably the Toyota 86 and the GR Corolla hot hatch. This cross-pollination of technologies allows both companies to offer unique and compelling products to their respective customer bases.

Looking ahead, the two companies are expected to deepen their collaboration in the development of electric vehicle (EV) technologies, including solid-state batteries. Subaru has announced ambitious plans to electrify a significant portion of its lineup by the end of the decade, and Toyota’s expertise in battery technology and EV powertrains will undoubtedly play a crucial role in achieving this goal.

Furthermore, the joint development of self-driving and connected car technologies is another area where Toyota and Subaru could leverage their combined resources and knowledge, ensuring that both brands remain competitive in an increasingly technologically advanced automotive landscape.

Competitive Advantages of the Partnership

The Toyota-Subaru partnership offers several competitive advantages to both companies, allowing them to navigate the challenges of an ever-evolving automotive industry more effectively.

1. Cost Savings: By sharing development costs, production facilities, and technological resources, Toyota and Subaru can significantly reduce their respective expenditures, freeing up funds for further innovation and product development.
2. Expertise Sharing: Each company brings its own unique strengths to the table. Toyota’s expertise in hybrid and alternative powertrain technologies, as well as its global manufacturing footprint, complements Subaru’s prowess in building capable all-wheel-drive vehicles and boxer engines.
3. Regulatory Compliance: Stricter emissions regulations and fuel economy standards are becoming the norm worldwide. By pooling their resources and leveraging each other’s strengths, Toyota and Subaru can more effectively meet these stringent requirements and avoid costly penalties or product discontinuations.
4. Competitiveness Against Larger Automakers: The automotive industry is dominated by a few global giants with immense resources. The Toyota-Subaru partnership allows these two companies to combine their efforts and resources, giving them a better chance to compete against industry heavyweights in terms of product offerings, technology, and market reach.

Why Toyota Doesn’t Fully Acquire Subaru

Given the depth of their partnership and the potential synergies, one might wonder why Toyota doesn’t simply acquire Subaru outright and fully integrate it into its operations. However, there are several reasons why Toyota has chosen to maintain Subaru as an independent entity, albeit with a significant ownership stake.

1. Preserving Brand Identity: Subaru has cultivated a unique brand identity over the years, with a loyal customer base attracted to its rugged, capable, and performance-oriented vehicles. A full acquisition by Toyota could potentially dilute this distinct identity, alienating existing Subaru enthusiasts.
2. Drawbacks of a Full Acquisition: While a full acquisition would provide Toyota with complete control over Subaru’s operations, it would also saddle the larger automaker with the financial and operational risks associated with integrating a separate company. Maintaining a strategic partnership allows for collaboration while mitigating some of these potential drawbacks.
3. Toyota’s Partnership Strategy: Toyota has historically favored strategic partnerships and partial ownerships over outright acquisitions. This approach allows the company to leverage the strengths and expertise of its partners without the need for complex integration processes or the assumption of excessive financial risks.
4. Possibility of a Future Full Buyout: While a full acquisition of Subaru by Toyota is not on the cards at the moment, the possibility cannot be entirely ruled out in the future. As the partnership deepens and the automotive industry continues to evolve, a scenario where Toyota deems it advantageous to fully integrate Subaru into its operations may arise.

Key Differences Between Toyota and Subaru

Despite their close collaboration, Toyota and Subaru remain distinct entities with their own unique identities, product lineups, and target markets. Understanding these differences is crucial in appreciating why a strategic partnership, rather than a full merger, might be the optimal approach for both companies.

1. Scale and Global Footprint: Toyota is one of the largest automakers in the world, with a truly global presence and a diverse portfolio of vehicles spanning various segments. In contrast, Subaru is a relatively smaller player with a more niche focus on all-wheel-drive crossovers, SUVs, and performance-oriented vehicles, primarily catering to markets like the United States, Japan, and select regions.
2. Product Lineup and Brand Image: Toyota is associated with reliable, practical, and fuel-efficient vehicles, with a strong emphasis on hybrid and alternative powertrain technologies. Subaru, on the other hand, has cultivated a brand image centered around outdoor adventure, performance, and capability, with its symmetrical all-wheel-drive systems and boxer engines being key selling points.
3. Target Customers: While there is some overlap, Toyota and Subaru generally cater to different customer bases. Toyota’s mainstream appeal and diverse product lineup attract a wide range of consumers seeking reliable and practical transportation solutions. Subaru, however, has a more niche following among outdoor enthusiasts, performance enthusiasts, and customers who prioritize all-weather capability and ruggedness.

By maintaining their distinct identities and targeting different customer segments, Toyota and Subaru can continue to offer a diverse range of products without direct internal competition, leveraging their respective strengths while benefiting from the strategic partnership.

What the Future Holds for Toyota and Subaru

As the automotive industry undergoes a seismic shift towards electrification, autonomous driving, and connected technologies, the Toyota-Subaru partnership is well-positioned to navigate these changes together. Here’s a glimpse of what the future may hold for these two automakers:

1. Joint Electrification Roadmaps: Both Toyota and Subaru have ambitious plans to electrify a significant portion of their lineups by the end of the decade. Their collaboration in developing dedicated EV platforms, solid-state battery technologies, and shared production facilities will be crucial in achieving these goals efficiently and cost-effectively.
2. More Shared Platforms and Manufacturing: Building on the success of their collaborative efforts with models like the bZ4X/Solterra and the planned three-row electric SUV, Toyota and Subaru are likely to continue co-developing and sharing platforms, particularly in the areas of electrification and alternative powertrains.
3. Balancing Collaboration and Individual Branding: While leveraging each other’s strengths and resources, Toyota and Subaru will need to strike a careful balance between collaboration and maintaining their distinct brand identities. This will involve selectively choosing areas for joint development while preserving unique product offerings that cater to their respective customer bases.
4. Self-Driving and Connected Technologies: As autonomous driving and connected car technologies continue to advance, Toyota and Subaru will likely pool their resources to develop cutting-edge solutions in these areas. Collaborating on these technologies can help both companies stay competitive and offer innovative features to their customers.

As the automotive landscape continues to evolve, the Toyota-Subaru partnership stands as a prime example of how strategic alliances can help companies navigate challenges, leverage complementary strengths, and remain competitive in an increasingly complex and technologically advanced industry.

Final Thoughts

In conclusion, while Toyota does not fully own Subaru, the two Japanese automakers have forged a close and mutually beneficial partnership. With Toyota holding a significant 20% ownership stake in Subaru, the companies have collaborated on various fronts, including vehicle development, production, and technology sharing.

The partnership has already yielded tangible results, such as the co-developed Subaru BRZ/Toyota 86 sports cars and the more recent Toyota bZ4X/Subaru Solterra electric vehicles. By pooling their resources and expertise, Toyota and Subaru have been able to reduce costs, meet stringent emissions regulations, and offer unique and compelling products to their respective customer bases.

Looking ahead, the future of the Toyota-Subaru partnership appears bright, with plans for further collaboration in areas such as electrification, self-driving technologies, and shared production facilities. However, both companies will need to strike a careful balance between leveraging each other’s strengths and preserving their distinct brand identities to cater to their respective target markets.

Ultimately, the Toyota-Subaru partnership exemplifies the power of strategic alliances in the automotive industry, allowing companies to navigate challenges, leverage complementary strengths, and remain competitive in an increasingly complex and technologically advanced landscape.