The deal brings Suzuki firmly into Toyota’ orbit, alongside Daihatsu Motor Co., Hino Motors Ltd., Subaru Corp., Mazda Motor Corp. and Yamaha Motor Co .
Rival Nissan Motor Co. has an alliance with France’s Renault, although that has been shaken following the ouster of former Chairman Carlos Ghosn, and with Mitsubishi Motors Corp.
Honda Motor Co has a tie-up with General Motors
Toyota has been looking to expand scale in next-generation technology and said this year it would offer free access to patents for EV motors and power control units. It believes that move would help it cut by as much as half the outlays for expanded electric and hybrid vehicle components in the United States, China and Japan.
Supplying rivals would greatly expand the scale of production for hardware.
Suzuki, which specializes in affordable small cars, had been struggling to keep pace with the huge costs of investing in research and development for automated driving functions. Suzuki has been seeking to team up with a larger automaker after an acrimonious split with Volkswagen.
Toyota has budgeted about seven times more on research and development than Suzuki for this fiscal year, and the smaller automaker has pointed to the soaring cost of making competitive cars as a reason to join forces with a partner.
Toyota said in June it aims to get half of its global sales from electrified vehicles by 2025, five years ahead of schedule, and will tap Chinese battery makers to meet the accelerated shift to electric cars.
Bloomberg contributed to this report