Toyota, Suzuki to produce cars for each other in India

Toyota, Suzuki to produce cars for each other in India

The two automakers have been exploring concrete projects for collaboration in a variety of areas, including that of a mutual supply of products and components, since signing a memorandum towards a business partnership in February a year ago.

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).

"By selling rebadged and slightly changed Balenos and Vitaras, Toyota can bolster its distribution network and move more towards expanding its market share".

The exchange of vehicles will begin as early as the spring of 2019.

The decision to make electric vehicles In India is the first major agreement by both the companies as part of the collaboration.

"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", the two companies said in a joint statement. The initial plan was to manufacture batteries for hybrid vehicles which will be subsequently used for electric vehicles as well.

Suzuki managed to dominate the Indian automobile market through a majority stake in the country's leading auto group Maruti Suzuki India Ltd., which sold about 1.6 million vehicles in 2017, constituting for every other vehicles sold in India.

The deal suggests deepening relationship between Toyota and Suzuki, which are planning on teaming up to continue with technological progresses in areas, such as electrification and autonomous driving.

Suzuki is the top automaker in India with a 47% share in the passenger vehicle market.

"By challenging and competing with each other with the goal of mutual improvement, Toyota and Suzuki aim to invigorate the Indian automotive market to further enhance their respective products and services to be offered to customers", the statement said.

In the past, Toyota had looked to Daihatsu for help to develop affordable, competitive cars in India.