Suzuki Motor Corp. and Toyota Motor Corp. will start a vehicle dismantling and recycling joint venture in India as the Japanese automakers expand their alliance in the country.
The joint venture, Maruti Suzuki Toyotsu India Pvt. Ltd (MSTI), will be owned equally by Suzuki’s unit Maruti Suzuki India Ltd and Toyota Tsusho India Ltd, a subsidiary of Toyota. It will build its first vehicle dismantling unit in Noida with a capacity to handle 2,000 vehicles per month. Similar facilities will also be opened in other parts of India.
The partnership will allow Suzuki and Toyota to promote recycling and support resource optimisation and conservation, while using environment-friendly systems and processes, said Kenichi Ayukawa, managing director of Maruti Suzuki, India’s largest carmaker by sales. “Scrapping of older vehicles in a scientific and environment-friendly manner will help reduce pollution and also make roads safer. A team of experts at MSTI will dismantle the vehicles using international technology and global standards," he said.
The announcement comes at a time when the roads ministry is working on a policy for vehicle scrapping to reduce the number of old vehicles on roads to curb vehicular pollution in major cities. Mumbai-based Mahindra and Mahindra was the first to set up a vehicle recycling unit in India.
MSTI will be responsible for procuring and dismantling end-of-life vehicles (ELV). The process will include complete solid and liquid waste management in accordance with Indian laws and globally approved quality and environment standards, the companies said. They did not disclose the investments that would be made in the venture.
With the Union government working on the vehicle scrappage policy, most of the automakers are expected to set up their respective scrapyards hoping to tap an additional source of revenue in the future. The auto industry has been lobbying with the government for a scrappage policy for the past few years as it is expected to generate more demand for vehicles at a time when growth in vehicle sales are expected to stay modest because of the emergence of shared mobility and new regulations that make vehicles more expensive.
“Toyota Tsusho has started ELV recycling in the 1970s in Japan. We believe that we will be able to contribute to the Indian society through our knowledge and experience of the ELV business. The first vehicle dismantling and recycling unit of MSTI is just the initial step and we are eager to expand to a pan-India base with Maruti Suzuki," said Naoji Saito, chief executive, metal division, Toyota Tsusho.
Toyota and Suzuki first announced their partnership in 2017 with the aim of developing affordable electric and hybrid vehicles for the Indian market. They decided to set up a lithium-ion battery manufacturing plant in Gujarat in collaboration with Toshiba Corp., for hybrid and electric vehicles. The companies subsequently expanded their collaboration to vehicle cross-badging, supply of powertrains, joint development of vehicles, and exports.
In August this year, the companies deepened their ties by buying small stakes in each other. Apart from manufacturing electric and hybrid models, Suzuki and Toyota now plan to jointly develop autonomous driving technology.
The two are also expected to venture into the affordable electric vehicle space in India in the next few years.
“We will introduce a compact battery electric vehicle but I can’t divulge anything more right now," Shigeki Terashi, executive vice-president and member of the board at Toyota, said ahead of the Tokyo Motor Show.