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Toyota to Up Its Stake in Subaru

Toyota is preparing to advance its stake in Japanese automaker Subaru.

Since Toyota stopped producing the Celica, the brand has been without a sports car. That should change soon. (Photo: Toyota)

Last year, Toyota purchased an 8.7-percent stake in its Japanese rival, relinquished by General Motors when the Detroit firm sold its 20-percent holding. Now, Toyota wants to double its stake, buying another 64.25 million Subaru shares at a reported cost of $294.4 million. So far, Toyota has jumped at the opportunity to expand production using Subaru's Indiana production facility, and the two have shared engineering and development for future vehicles. In the future, however, the two brands' collaborations will be much more in depth.

It has been speculated that topics of interest between the two brands include Toyota's Hybrid Synergy Drive technology, which would allow Subaru to produce its first hybrid. But the biggest news is that Toyota is collaborating with Subaru to develop a new compact sports car.

The standard model will be rear wheel drive and affordable, the upgraded model will boast turbo power and AWD, like the old Celica GT-Four. (Photo: Toyota)

Toyota of Germany confirmed the rumor that the brand would be returning to the sports car market with more than one vehicle. The one that concerns Subaru would be a Celica successor, and engineering would be shared between the two brands while production would occur at Subaru's plant.

The model is supposed to hark back to Toyota's rallying days, with an entry level rear wheel drive model and a high-performance all wheel drive version. The former would feature Subaru's small 2.0-liter H-4 engine and have a projected target price of $17k, mimicking the layout of the RWD AE86-generation Corolla. The more powerful model would be powered by the STI's engine. To prevent overlap, the Toyota would only be offered as a Coupe, and could arrive as early as next year.

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