Toyota Motor Corp. and Suzuki Motor Corp. have agreed to form a tie-up in advanced technology development and other operations, sources close to the matter said Saturday.
The two automakers will continue to discuss whether to expand the partnership to include a capital alliance, the sources said.
The comprehensive tie-up comes after Toyota, Japan's biggest automaker by volume, and Suzuki, a small-car specialist, said in October they would start talks on how they could join forces. The deal is expected to be announced Monday, according to the sources.
The global auto industry is facing soaring costs to meet stricter emissions regulations and develop advanced safety technology for electric vehicles and autonomous driving systems.
The Toyota-Suzuki tie-up is the latest in the domestic auto industry intended to share those hefty costs. Nissan Motor Co. took a 34 percent stake in ailing Mitsubishi Motors Corp. last year.
Toyota also expanded joint operations with Mazda Motor Corp. in 2015 to cooperate on developing environmental and self-driving technologies. The two are now studying joint development of electric vehicles.
Suzuki, which has been lagging in technology development, is hoping to gain Toyota's support after the Shizuoka-based carmaker dissolved a broad alliance with Germany's Volkswagen AG in 2015.
Toyota may also seek to jointly develop small electric vehicles with Suzuki to capitalize on its new partner's strength in small vehicles.