Toyota Motor, the third biggest car manufacturer in the world, has confirmed that it will buy a 5% share in Yamaha Motor for Y10bn.

The deal worth $97.6m US dollars, or a total of 12.5 million shares will see the two motor groups form a coalition to aid engine development and production.

The alliance between Toyota and the world’s second largest motorcycle manufacturer, Yamaha Motor, will strengthen Toyota’s resources and develop their engines prior to their entry to F1 Racing in 2001.

By engaging in this deal Toyota will benefit from Yamaha’s wealth of knowledge and experience, but market analysts have also suggested Toyota will be able to increase its appeal with a younger market by playing on the Yamaha branding.

It is not clear at this stage what benefits will befall Yamaha Motor. However a Y10.5bn investment will come as a welcome gain for Yamaha who are predicting yearly losses, to be announced at the end of the month, of around Y1bn. Therefore with a new commercial partner with estimated liquid assets of around Y2.7tn in liquid assets the future for Yamaha looks promising.