
Japanese auto majors Suzuki Motor Corp and Toyota Motor Corp have concluded a basic agreement for supply of hybrid and other vehicles to each other, which would see Toyota sell Suzuki's India subsidiary Maruti's premium hatchback Baleno and compact SUV Vitara Brezza through its own subsidiary in India, while Maruti would get Toyota's global best selling model Corolla. Though the companies have not specified when they would start selling each other's cars, it is believed it would begin in early 2019.
Further, the companies also have not clarified whether only the hybrid or possible electric versions of the cars would be shared and sold; but the two companies have been in talks since November last year for a business cooperation in the Indian market with focus on electrification and hybridization of their portfolio in the country.
A Nikkei report from Japan, where the announcement was made said Maruti will supply 50,000 units of the Baleno and Brezza to Toyota, while Toyota will supply around 10,000 units of the Corolla annually to Maruti in both hybrid and petrol versions.
Toyota is one of the pioneers in alternate vehicle technologies worldwide and has the best selling hybrid model in the world in the Prius. It is an area that is a weakling for Suzuki. At the same time, Toyota's position is considerably weak in emerging markets like India where it has less than 5 per cent share. Last year, India pipped Germany to become the fourth largest car market in the world and is expected to become the second largest behind only China in the next 10 years. Emerging markets account for only 40 per cent of Toyota's global sales. Suzuki's India subsidiary Maruti, is the leader in the domestic market with an over 50 percent share.
"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," Toyota said in a press release.
"The vehicles will be sold by respective subsidiaries of Toyota and Suzuki based in India through their sales networks. 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."
Currently, all the three models are sold only in conventional petrol and diesel power trains in India. However, Suzuki does sell a mild hybrid version of the Baleno in Japan, which is made and exported from Maruti's Gujarat factory in India. Similarly, Toyota also has a hybrid version of the Corolla in other markets around the world. The compact SUV Brezza is sold only with a diesel engine for now.
The collaboration between the two firms go beyond just these three models. As per the MoU concluded on February 6, 2017, the companies have been exploring concrete projects for collaboration in areas including environmental technology, safety technology, information technology, and the mutual supply of products and components. It also includes introducing battery electric vehicles in the Indian market around 2020 as one outcome of the joint exploration into the partnership.
"Today's announcement is another outcome and underscores the progress Toyota and Suzuki have together made, and it aims to bolster both companies' product line-ups and encourage competition in the Indian automotive market," the release said.