Major U.S. automaker General Motors Corp. will double its equity stake in Suzuki Motor Corp. to 20 percent, the two firms announced Thursday.
In recognition of the increased stake, Suzuki will allow GM Chairman John Smith to join Suzuki's board of directors next June -- the first time the Japanese carmaker has accepted a board member from GM, its largest shareholder.
The two companies will also strengthen their alliance by exchanging personnel from major divisions.
Japan's top minivehicle maker will issue roughly 6.42 million yen in new shares for GM to purchase by early next year, Smith and Suzuki Motor Chairman Osamu Suzuki said at a joint press conference in Tokyo.
Suzuki told the news conference that he believes it is important to raise GM's 10 percent stake to emphasize that it will remain in GM's fold as it pursues its global strategies. The heightened capital participation means that Suzuki's earnings will be reflected in GM's consolidated financial reports.
Smith added that the latest announcement is aimed at boosting the two firms' cooperative efforts in the small-car market in Asia.
GM jointly produces vehicles with Suzuki in Canada and manufactures Suzuki vehicles elsewhere.
The two companies will begin production of their jointly developed vehicle, the YGM-1, at a Suzuki plant in Kosai, Shizuoka Prefecture, next September.
Last month, Suzuki said it would supply GM with its WagonR Plus for sale in Japan on an original equipment manufacturing basis.
GM will sell the small wagon under the Chevrolet MW S Edition brand through its Saturn dealership network.
GM, which took a 10 percent stake in Suzuki Motor in 1998, also owns 49 percent of Isuzu Motors and 20 percent of Fuji Heavy Industries.