File picture: Kacper Pempel / Reuters.

Tokyo - Toyota and Suzuki have been in talks on a potential tie-up from a variety of angles, with cross-shareholdings a possibility, Japanese media reported on Wednesday.

The two Japanese carmakers are looking to take advantage of each other's know-how and capitalise on demand for compact cars in India and other emerging markets, the Nikkei business daily reported without citing any sources.

Toyota aims to utilise the partnership to expand its operations in Asia while Suzuki wants to take advantage of the world's largest carmaker's next-generation technology, the report said.

In December 2009, Suzuki formed a capital alliance with Volkswagen after its long-term relationship with General Motors, but differences of opinion over management and technology sharing led the Japanese carmaker to ask for international arbitration. The two carmakers ended the tie-up in September.

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