Toyota Motor Corp. and Sanyo Electric Co. are discussing the possibility of the auto maker buying batteries for hybrid vehicles from Sanyo, a person familiar with the situation told Dow Jones Newswires Wednesday.
Earlier in the day, shares in electronics supplier Sanyo surged as much as 17% after the Nikkei reported that Toyota will begin buying lithium ion batteries for hybrid cars from Sanyo in 2011, as Toyota's battery joint venture with Panasonic Corp. can't keep up with demand.
Late last year, Panasonic agreed to buy Sanyo in a deal valued over $9 billion, with a tender offer likely to take place once regulatory hurdles are cleared.
Sanyo shares eventually closed 10% higher in Tokyo at Y247, with trading volume about five times the issue's normal volume. Toyota shares ended up 0.2% at Y4,050, while the Nikkei 225 Stock Average ended down 0.8% at 10,204.00.
The discussions between the two companies come amid an upsurge in demand for hybrid cars that is helping to fuel a revival in the Japanese auto sector, which was hit hard by the financial crisis and sank into losses in the last fiscal year.
Government purchasing incentives in key markets for environmentally friendly vehicles, such as the "cash for clunkers" scheme in the U.S., are driving recent rises in auto demand and helping to support Toyota's sales.
The Nikkei reported separately Wednesday that Toyota has notified key parts suppliers that its worldwide production plan for the current year has been increased to 5.95 million units from 5.8 million.
