Suzuki, in which the US car maker already has a 10 per cent stake, bought 500,000 shares, a company spokesman said. "Our share may be very fractional at some 0.07 per cent and will have no significant impact," the spokesman said. "But it will help strengthen the partnership between the two companies."

It is the first time Suzuki has acquired a stake in GM. The US company bought a 5.6 per cent stake in the top Japanese mini-car market in 1981. In 1982, GM's stake in Suzuki was reduced to 3.3 per cent after a new stock issue by the Japanese firm.

But last September, GM raised its stake in Suzuki to 10 per cent, becoming its biggest shareholder, as the world's car makersmoved on to realign themselves across international borders for survival.

Meanwhile, Mazda, controlled by US auto giant Ford Motor Co, has agreed to supply small commercial vehicles to Mitsubishi on an original equipment manufacturer's basis, the Nihon Keizai Shimbun said.

Mitsubishi is to stop making its Delica model commercial vehicles and start procuring Mazda's Bongo models instead as early as June, the business daily said. Sales of Mitsubishi's Delica have tumbled to 15,000 units a year from a peak of 78,000. Stock in both car makers climbed on the Tokyo market today, buoyed by the report.

Mazda's share price rose 27 yen, or 6.1 per cent, to close the morning at 472 yen. While shares in Mitsubishi were up 11 yen. Or 2.5 per cent, at 443 yen. Mitsubishi is considering supplying environmental-friendly gasoline direct injection engines to Mazda, according to the report.

Separately, the two are also studying a proposal under which Mazda would source mini-cars from Mitsubishi motors, the report said.At present, Mazda buys mini-cars from Suzuki Motor Corp. Neither firm would comment on the report.

The Nihon Keizai said the move could lead to a large-scale alliance of Ford, Mazda and Mitsubishi.