After months of intense speculation, Toyota has finally confirmed: they are co-developing the next-generation Toyota 86 with Subaru. The confirmation comes as part of Toyota and Subaru’s increasingly intertwined relationship which sees Toyota getting a larger stake in the all-wheel drive specialist.

Citing increased competition in the realm of CASE or Connected Autonomous Shared and Electric vehicles, Toyota has acquired additional shares in Subaru, increasing it from the current 16.83 percent to 20 percent. Furthermore, Toyota actually foresees that Subaru will become an affiliated company in the future like Daihatsu.

Corporate changes aside, Toyota says that they will be jointly-developing all-wheel drive models that “offer the ultimate sensation in all-wheel driving” as well as the aforementioned next-generation Toyota 86 and Subaru BRZ. These announcements are on top of the dedicated battery-electric vehicle platform that the two companies have announced previously.

In a separate report courtesy of Which Car/Motor, Toyota GR Supra Chief Engineer Tatsuya Tada was quoted that the next-generation Toyota 86 will surpass even the almighty Toyota/BMW flagship sportscar.

For its part, Subaru will gain more access to Toyota’s gasoline-electric hybrid system and will benefit from Toyota’s resources in fast tracking its development of connected and autonomous driving vehicles.

Toyota President Akio Toyoda has nothing but praises on the new agreement, saying: “I, myself, am a rallyist, and, through my experience of training hard in an Impreza, I have felt in my veins the wonders of Subaru’s AWD technologies… Our companies, both of which have long pursued driving enjoyment, now want to pursue the possibilities of making ever-better cars suitable for the CASE era by bringing together our strengths and by further deepening our relationship.”

Additional Sources: Which Car