Toyota, Suzuki Partner in Indian Market

Ruben Fields
April 2, 2018

Suzuki has dominated the Indian automobile market through a majority stake in Maruti Suzuki India Ltd, the country's largest automaker, which sold roughly 1.6 million vehicles a year ago, accounting for every other auto sold in the country.

The companies stated that Toyota will provide about 10,000 its hybrid and gasoline Corolla sedans to Suzuki, which in turn will produce 30,000 to 50,000 units annually of its compact Baleno hatchback and Vitara Brezza compact sport utility vehicle (SUV).

The agreement specifics at present outline Suzuki Baleno and Vitara Brezza supplies to Toyota.

Toyota and Suzuki, the two Japanese firms on Thursday announced that they would be producing four-wheelers for each other.

Details on each model, such as the schedule of the start of supply, number of supplied units, vehicle specifications, and supply pricing, will be considered at a later stage.

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With Toyota supplying cars to Suzuki, the company hopes to improve local factory operation rates, which has stayed around 50 percent.

The latest agreement between Toyota and Suzuki will also help the companies to enhance their product portfolio in India.

In February 2017, Toyota and Suzuki had concluded a memorandum towards business partnership and since then, they have been exploring concrete projects for collaboration in areas including environmental technology, safety technology, information technology, and the mutual supply of products and components. In November 2017, a MoU was announced between Toyota and Suzuki to consider a "cooperative structure to introduce battery electric vehicles" in India by 2020.

Toyota, through its Bangalore-based joint venture company Toyota Kirloskar Motors, has not really been able to penetrate the Indian market with its existing models. The agreement also states that both the companies will enhance efforts to source components locally to the extent possible, to achieve the "Make in India" initiative promoted by the government. Toyota and Suzuki are committed to moving towards less fuel-consuming vehicles in aiding India reduce its environmental footprint.

Maruti Suzuki is the PV and UV market leader in India with a huge lead over rivals. But only about 40% of Toyota's global sales came from these areas a year ago, and the automaker controls less than 10% of the market in countries like India, Russia and Brazil. Toyota's markets for its automobiles are Japan, North America, Europe and Asia. The automaker is now looking to bolster its sales of mainstay compact cars in India, with the addition of Suzuki's vehicles. By using Maruti Suzuki's extensive sales network in India, Toyota's lesser-known models could reach a wider audience and vice versa. Together, the duo will release jointly developed electric vehicles in India in 2020.

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