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The Surprising Reason Why Toyota Partnered With Suzuki

Industry News / 14 Comments

Suzuki has something Toyota desperately wants.

Toyota recently announced a partnership with fellow Japanese automaker Suzuki. Other companies such as General Motors and Volkswagen have partnered with Suzuki in the past but now it's Toyota's turn to benefit from a tie-up with Japan's fourth-largest automaker. The deal will involve Toyota buying a small stake in Suzuki and Suzuki doing the same with Toyota. Toyota says the partnership will focus on "promoting collaboration in new fields, including the field of autonomous driving" and includes building Suzuki-badged vehicles based on the RAV4 Hybrid and Corolla.

This all sounds like good news for Suzuki but what does Toyota have to gain from the partnership? Automotive News explains Toyota's interest in Suzuki with just one word - India.

via CarBuzz
via CarBuzz
via Suzuki

Suzuki's Maruti Suzuki India subsidiary has managed to capture a massive 46% market share in India. The next closest competitor, Hyundai Motor India, musters a measly 16%. Toyota is far behind with less than 5% market share but the company is hoping its partnership with Suzuki can change its fortunes. Even before this deal was announced, Toyota and Suzuki were in talks to work together in the Indian market.

Earlier this year, Suzuki even agreed to build two Toyota-badged compact vehicles for sale in India and build a Suzuki compact SUV in a Toyota plant. The two companies also agreed to promote hybrid vehicles for Toyota.

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via Suzuki
via Suzuki
via Suzuki
via Suzuki

Toyota hopes to learn from Suzuki how to engineer and build low-cost vehicles for emerging markets such as India. Toyota has also increased its scale by adding alliances with Daihatsu, Mazda, Subaru, and now Suzuki. It remains to be seen how this partnership will impact Toyota's and Suzuki's product lines moving forward but it seems unlikely any of these vehicles will be sold in the US market. Sorry to everyone hoping Toyota could import a rebadged Suzuki Jimny to the US - this deal is targeted strictly at India.

via Toyota
via Toyota
via Toyota

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