The FINANCIAL — TOYOTA MOTOR CORPORATION (TMC) announced on July 28 that TMC and Central Motor Co., Ltd. (Central Motor) have signed a share exchange agreement by which Central Motor shall become a wholly owned subsidiary of TMC, each company having adopted a resolution approving the share exchange at a meeting of its board of directors held on July 28.
The decision was made to establish an even stronger relationship between TMC and Central Motor, to realize a more efficient production system for the Toyota Group, and to further improve quality and cost competitiveness, with an aim to generally strengthen the Toyota Group.
In the midst of rapid changes in the automotive industry environment, TMC believes that immediate response to secure domestic human resources, diversify disaster risks and immediately respond to changes in demand is essential. This is reflected by the Toyota Group's policy to position Japan's Tohoku region (in northeastern Japan) as its third domestic production base, in addition to production bases in the Chubu region (in central Japan) and in northern Kyushu (in southern Japan).
Central Motor, after taking into consideration various factors such as the aged state of its head office plant, changes in the environs surrounding the company and distribution inefficiencies, has decided to move its head office plant to Miyagi Prefecture (in the Tohoku region), with the aim to start operations there in 2010.
An outline of the method, timetable and share exchange ratio for Central Motor's conversion to a full TMC subsidiary follows.
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