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Home / Opinion / Views /  Why Toyota-Suzuki stands a better chance than the auto marriages of the past

Auto majors Toyota and Suzuki have announced plans for deepening their collaboration in India. The partnership of almost two years stands out, as tie-ups between auto companies invariably end up on the chopping board. Cracks start to appear within two or three years. The sector has a history of divorces following short honeymoons: Ford-Mahindra; Tata Motors-Volkswagen (the joint venture stalled and was called off before take-off); Mahindra-Renault and so on.

In Toyota-Suzuki’s case, however, the relationship has been growing stronger and deeper in defiance of the history of car-makers’ demonstrated record of finding it hard to blend cultures of manufacturing and business alliances over the long term. The net outcome of the marriage between Toyota and Suzuki could prove to be an automotive landmark. What’s different about the Toyota-Suzuki dalliance?

For one, there’s a crystal-clear business case for who brings what to the table. Suzuki (Maruti) is the undisputed market champ in India in terms of revenue, with proven expertise in two distinct domains: lightweight manufacturing and small cars. Toyota, on the other hand, is revered in Japan, where it is the number one maker of cars, and an established leader in hybrid and electric automotive technology; its hybrid car, Prius, has been around for 25 years.

Toyota has, in fact, been the number one carmaker on the whole planet for the last few years, and outranks Mercedes-Benz, Tesla and Volkswagen. In India, though, it hasn’t managed to crack the code in small cars, which drive volumes. Its best-sellers here have predominantly been large cars, such as the SUV Toyota Fortuner, as well as the MPV Innova, both of which are likely to face increasingly stringent norms, as the government raises the heat on CAFE (Corporate Average Fuel Economy) regulations for the industry.

And so, Suzuki’s small car and lightweight manufacturing know-how comes as a bona fide value-add for Toyota. Daihatsu, its lower-end brand, has been struggling on both volumes as well as positioning. Toyota would be keen to pick up a trick or two for turning it around from Maruti’s blockbuster success with its products and the Indian car market.

Then, as the world increasingly moves away from ICE-engine cars and towards alternative sources of clean fuel, Toyota’s hybrid and electric tech can provide a boost to Suzuki. This is an area that Toyota knows; its hybrid cars, such as the Prius and hybrid Camry, have been wildly successful with consumers trying out clean hybrid tech. Toyota's expertise in SUVs and bigger four-wheel-drive cars also offers Suzuki benefits in India.

Second, culture, that overarching factor for car companies, and often the make-or-break factor of alliances between them, is a lesser challenge for Toyota and Suzuki, both Japanese. That there are fewer cultural differences is critical in the relationship between the two Japanese auto majors. The common ancestry gives them shared engineering philosophies and unwavering focus on quality in their DNA. The Japanese manufacturing legacy of prioritizing quality and code of ethics ranges from the principles of Kaizen, perpetual improvement, and JIT, just in time, Poka Yoke, error-proofing, and more.

Finally, Toyota and Suzuki struck a global deal that went live in 2019. It covers not just India but also Africa, Europe and other markets, making the alliance more substantial and deeper in terms of engagement. In contrast, most of the other automotive alliances and partnerships in India were aimed at drawing benefits from tech rub-offs or distribution strategies. The scope was limited to the subcontinent. They did not last.

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