Toyota, Suzuki confirm partnership - Maruti to be the biggest gainer

Toyota, Suzuki confirm partnership – Maruti to be the biggest gainer

The collaboration includes infrastructure development, industrial standards and technological R&D.

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It was in October last year that Japanese auto makers, Toyota and Suzuki first announced that that they were in discussions over a business partnership. A few hours ago, the two major auto brands have confirmed about forming a new partnership.

This news comes a little over one year after Suzuki Motor Corp parted ways with Volkswagen AG after a 6 year old partnership. Collaboration with Toyota would allow Suzuki to gain in terms of R&D with Toyota having set apart 1.07 trillion yen ($10.3 billion), 7 times in excess of Suzuki’s budgeted amount.

Maruti Suzuki has the widest sales and service network in India.

Suzuki Motor will have access to Toyota’s technology while Toyota would benefit from a strong market position held by Suzuki in India. The two automakers will also form an alliance where green vehicles, safety and information technology and supply of products and components are concerned. Toyota is considered as one of the leaders when it comes to electric vehicle / hybrid technology. They have also invested heavily in driverless tech.

This partnership will be on a global scale, and India’s Maruti is touted to be the biggest gainer from this newly formed deal, whose details are yet not revealed. Maruti Suzuki India Ltd. is a subsidiary of Suzuki, which sells more cars in India than the parent manages to sell across the globe. With Toyota giving Suzuki access to their state of the art new-age technologies and IT, Maruti will be able to implement the same in their cars for India in the near future. Below is a comparison chart of Toyota vs Suzuki global performance and India performance.

Image – Live Mint

Still in its planning stage, both Toyota and Suzuki have agreed to ensure early completion of this partnership agreement. The alliance will also help Toyota to have access to Suzuki’s well developed supply chain network in India formed since 1980 while it will help Toyota to develop and sell mainstream cars especially for the local market.

Suzuki Motor has a strong hold over the Indian automobile sector through Maruti Suzuki India Limited which sells over 50% of cars sold in the country while Toyota is no where close to Maruti in terms of sales. With Toyota having plans to launch affordable small cars in India in the future via their newly acquired Daihatsu brand, they will find Maruti’s network helpful in increasing their own sales and penetrate Indian market with much more efficiency.

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