The Two Car Companies Forming an Unlikely Partnership

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Since Toyota Motor Corp and Suzuki Motor Corp (both Japan) first announced their plans to explore a business partnership in October 2016, their cooperation has come a long way. In March 2020 the two automakers decided to expand their alliance to markets in Africa and Europe, where they will sell each other’s vehicles and share technical know-how. The two automakers will collaborate on hybrids and electric vehicles, in what could be the first step towards a broader alliance. Using the volkswagen VIN decoder you may be able to find out information about the car before you purchase. In addition to bringing together Toyota’s strength in electrification technologies and Suzuki’s strength in technologies for compact vehicles, the two manufacturers intend to grow in new fields, such as collaboration in production and the widespread popularisation of electrified vehicles.

 

Forging a partnership

One of the first joint initiatives undertaken by Toyota and Suzuki was to launch EVs in India by 2020. Suzuki, through its subsidiary Maruti Suzuki, is by far the market leader there, giving it a strong platform to expand into alternative fuel vehicles. Toyota will work on the procurement of hybrid systems, batteries, and engines in India. It has also considered supplying its hybrid-car system to Suzuki for the global market while building two EVs for Suzuki on its RAV4 and Corolla platforms in Europe.

The two Japanese automakers have also agreed to expand their collaboration to vehicles powered by internal-combustion engines. Suzuki plans to supply two compact cars based on its Ciaz sedan and Ertiga multi-purpose vehicle (MPV) to Toyota in India, as well as exploring the supply of its India-made vehicles to Toyota in Africa. Additionally, it has also provided newly developed engines for Toyota’s compact cars, with the production of these engines taking place at Toyota’s manufacturing site in Poland. Suzuki’s Maruti Suzuki India subsidiary has managed to capture a massive 46% market share in India. The next closest competitor, Hyundai Motor India, musters 16%. Toyota is far behind with less than 5% market share, but the company is hoping its partnership with Suzuki can change its fortunes. Even before this deal was announced, Toyota and Suzuki were in talks to work together in the Indian market.

 

Benefit and purpose

The automobile sector is currently experiencing a turning point unprecedented in both scope and scale, not only because of enhanced environmental regulations but also from new entries from distinct industries and diversified mobility businesses. The two companies intend to achieve sustainable growth, by overcoming new challenges surrounding the automobile sector by building and deepening cooperative relationships in new fields while continuing to be competitors, in addition to strengthening the technologies and products in which each company specializes and their existing business foundations. Specifically, to take up challenges together in this transitional era, the two companies plan to establish and promote a long-term partnership between the two companies for promoting collaboration in new fields, including the field of autonomous driving.

The execution of the capital alliance agreement is a confirmation and expression of the outcome of sincere and careful discussions between the two companies, and it will serve for building and promoting their future partnership in new fields. As part of the latest agreement, Suzuki will also buy a token stake in Toyota. But even before the capital tie-up, the partnership was helping Toyota in India. This year, Suzuki agreed to supply Toyota with two compact vehicles for sale in India and to assign production of a Suzuki compact SUV to a Toyota plant in India. They also agreed that Toyota will promote hybrids in India by locally procuring components.