Consequently, the agreement has provided Toyota an opportunity to eye for establishing supremacy over Indian car market. Daihatsu will become a wholly owned subsidiary of Toyota by way of share exchange following the agreement, reports Toyota Global Newsroom.

The purpose of the agreement is to develop of ever-better cars by adopting a unified strategy for the small car segment. Both the companies will enjoy freedom for focusing on their core competencies.

As part of the new arrangement, the Daihatsu division will take the lead in developing new small cars, both for itself and for its parent company. Toyota in turn will also share key technologies with Daihatsu, and both will share each other's networks in emerging markets, reports AutoBlog.

Both companies will utilize each other's bases of operations in emerging markets. Daihatsu will take the lead in enhancing efficiency and adaptability in development, procurement and production processes. Toyota's sales expertise and infrastructure will be utilized by both companies to improve Daihatsu's branding and profitability within Japan.

Becoming a wholly owned subsidiary means that Daihatsu will be delisted from the stock exchange. But Daihatsu President Masanori Mitsui and Toyota President Akio Toyoda expressed their confidence for convincing the shareholders over the decision. Probably, Toyota President is eyeing far away yet to be reachable, one of the largest mini car market around the globe, India.