New Delhi: Suzuki Motor Corp. will use a factory of Toyota Motor Corp. in India to make its compact sport utility vehicle (SUV), Vitara Brezza, from 2022 as the Japanese auto makers deepen their ties in the world’s fourth-largest automobile market.
The two companies will also seek to popularize ecofriendly hybrid-electric vehicles through sourcing of systems, engines and batteries locally. The auto makers will also jointly develop a a Toyota minivan that will be supplied to Suzuki in India.
“Moving forward, in so far as Toyota and Suzuki continue to fairly and freely compete against each other, both companies intend to consider further collaboration to realize a sustainable future mobility society while respecting all applicable laws," the companies said in a joint statement.
Toyota and Suzuki announced their partnership in May last year to develop affordable hybrid and electric vehicles for the Indian market. Both later decided to broaden the ambit of their alliance by agreeing to sell specific models of each other under their own brand names through their dealership networks.
Suzuki will supply its Baleno hatchback and Vitara Brezza SUV to Toyota, while the former will get to sell the Corolla sedan.
Both companies on Wednesday announced plans to take their alliance to the global level, as part of which Toyota can use Suzuki’s vehicles as affordable, entry-level products in markets where the world’s largest auto maker has a negligible presence.
Under the expanded partnership, Suzuki will supply its Ciaz mid-size sedan and Ertiga minivan to Toyota’s unit in India. Also, Toyota will share its “Toyota Hybrid System" with Suzuki for joint development of hybrid vehicles.
Toyota and its unit, Denso Corp., will meanwhile work with Suzuki to adopt newly developed Suzuki engines for compact vehicles. The engines will be manufactured at Toyota’s plant in Poland. Meanwhile, models such as the Baleno, Vitara Brezza, Ciaz and Ertiga will also be exported to Africa by Maruti Suzuki India Ltd, where they will be retailed by Toyota dealerships.
The two firms also agreed for Toyota to supply two hybrid-electric vehicles to Suzuki in Europe, which will be based on Toyota’s Rav4 and Corolla Wagon vehicle platforms.
On 14 September last year, Mint reported that Toyota’s local unit, Toyota Kirloskar Motor Pvt. Ltd, is studying the feasibility of making Suzuki vehicles at its second factory on the outskirts of Bengaluru.
The step to make Suzuki vehicles at Toyota’s plant will help boost capacity utilization. That plant currently churns out models such as the Etios Liva and Etios cars, as well as the Yaris sedan, sales of which have remained subdued.
In addition, Toyota’s move to sell two more Suzuki vehicles can let it grow its modest market share in India’s passenger vehicle industry. Toyota had a 4.31% share of India’s 3.08 million domestic market as of end-February, compared with 51.08% for Maruti Suzuki India, the country’s largest carmaker.
Toyota last week announced that it had begun selling models such as the Alto, Swift, Ciaz and Ertiga under the Suzuki brand in Kenya and the pact would be expanded to other key markets in Africa.
Hybrid technologies would play a huge role in many markets, Toyota president Akio Toyoda said in a statement.
“Through our new agreement, we look forward to the wider use of hybrid technologies, not only in India and Europe, but around the world. At the same time, we believe that the expansion of our business partnership with Suzuki—from the mutual supply of vehicles and powertrains to the domains of development and production—will help give us the competitive edge we will need to survive this once-in-a-century period of profound transformation. We intend to strengthen the competitiveness of both our companies by applying our strong points and learning from each other," Toyoda said.
“At the time we announced our scope of cooperation in May last year, I spoke that we will strive for success globally," said Suzuki chairman Osamu Suzuki. “I have seen progress in the partnership since then, and it is my pleasure to be able to make this announcement today regarding the status of partnership on a global basis, including Europe and Africa. In addition, we appreciate the kind offer from Toyota to let us make use of their hybrid technology. We will continue our utmost efforts."
The focus on developing hybrid vehicles also points towards the lack of expertise of Japanese companies in the domain of electric vehicles when compared to their Chinese or South Korean competitors.
Suzuki, along with Denso and Toshiba Corp., has formed a joint venture to establish a lithium-ion battery manufacturing plant in Gujarat for hybrid vehicles.