Toyota and Suzuki ink expansive collaboration, India key beneficiary

Around 13 months after having concluded a memorandum of understanding toward business partnership, Toyota Motor Corporation and Suzuki Motor Corporation today announced their agreement to begin considering concrete collaboration in new fields.

The two Japanese car makers, in addition to bringing together Toyota's strength in electrification technologies and Suzuki's strength in technologies for compact vehicles, intend to grow in new fields, such as joint collaboration in production and in the widespread popularisation of electrified vehicles.

The collaboration plan is split into four market strategies: Global, Europe, India and Africa. From the looks of it, much of the collaboration is targeted to benefit from the fast-growing Indian market.

India in the crosshairs
The two OEMs plan to develop and market spread hybrid electric vehicle (HEV) technologies in India through local procurement of HEV systems, engines, and batteries. There will also be OEM supply of two compact vehicles built on Suzuki platforms (Ciaz sedan and Ertiga MPV) to Toyota in India. Drawing upon Suzuki's expertise in developing vehicles in India, there will also be joint development of a Toyota C-segment MPV and OEM supply to Suzuki. And from 2022, there will be production of the Suzuki-developed compact SUV Vitara Brezza, the highest-selling SUV in India, at Toyota Kirloskar Motor (TKM) from 2022. Interestingly, there will be OEM supply of Suzuki's India-produced vehicles (Baleno, Vitara Brezza, Ciaz, Ertiga) to Toyota, targeting the African market.

It may be recollected that in September 2017, Suzuki Motor Corporation laid the foundation stone for India’s first lithium-ion battery manufacturing plant at Hansalpur in Gujarat. The plant is being set up jointly between Suzuki Motor, Toshiba and Denso to make electric and hybrid cars in India for global use. A total of $180 million (Rs 1,137 crore) has been invested between Toshiba, Denso and Suzuki for the lithium-ion battery manufacturing plant slated to be ready by 2020.

The manufacturing operation will utilise cell modules from Toshiba, while Denso will contribute its expertise by sharing the technology platform. The battery joint venture sees the equity stake split between Suzuki (50 percent), Toshiba (40 percent) and Denso (10 percent). Suzuki Motor Corporation, which is the main driver for the JV, will be aiming to drive home the advantage of manufacturing lithium-ion batteries in its key global market – India – where the government is keen tp promote greater adoption of electric vehicles (EVs).

The lithium-ion battery manufacturing plant will manufacture and supply EV batteries to the Suzuki plant in Gujarat, which will manufacture electric and hybrid cars for export. Given the heightened focus on all-electric mobility in India by the year 2030, Maruti Suzuki India will gain significantly from this all-Japanese JV.

Suzuki-branded hybrid cars based on RAV4 and Corolla for Europe
While the global plan is for Toyota to supply its THS (Toyota Hybrid System) to Suzuki, in Europe there will be OEM supply of two new electrified vehicles built on Toyota platforms (RAV4, Corolla Wagon) to Suzuki in Europe. Toyota is to adopt newly developed Suzuki engines for compact vehicles. Such engines are to be supported by Denso and Toyota, and will be manufactured at Toyota Motor Manufacturing Poland.

Toyota president Akio Toyoda said, "When it comes to vehicle electrification, which is expected to make further inroads, hybrid technologies are seen as playing a huge role in many markets, as from before. Widespread acceptance is necessary for electrified vehicles to be able to contribute to Earth's environment."

On October 12, 2016, Toyota's president Akio Toyoda and Osamu Suzuki, chairman of Suzuki Motor Corporation, first announced plans to explore a business partnership to strengthen collaboration in the environment, safety, and information technology fields.

"Through our new agreement, we look forward to the wider use of hybrid technologies, not only in India and Europe, but around the world. At the same time, we believe that the expansion of our business partnership with Suzuki ― from the mutual supply of vehicles and powertrains to the domains of development and production ― will help give us the competitive edge we will need to survive this once-in-a-century period of profound transformation. We intend to strengthen the competitiveness of both our companies by applying our strong points and learning from each other," added Toyoda. 

Suzuki Chairman Osamu Suzuki said, "At the time we announced our scope of cooperation in May last year, I spoke that we will strive for success globally. I have seen progress in the partnership since then, and it is my pleasure to be able to make this announcement today regarding the status of partnership on a global basis, including Europe and Africa. In addition, we appreciate the kind offer from Toyota to let us make use of their hybrid technology. We will continue our utmost efforts."