Toyota and Suzuki partnership could be a win-win deal for both carmakers

The partnership could provide both Toyota and Suzuki greater market penetration as well as export opportunities.

In what is likely to be a significant moment in Japanese automotive history, Toyota Motor Corp and Suzuki Motor Corp have agreed to begin formal talks aimed at creating a joint collaboration for the next generation of green vehicles, including, technologies, shared procurement and safety techs.

The agreement lays the foundation stone for a joint collaboration and brings the reality of more affordable compact next generation green cars, a step closer to reality.

Of strategic value, the agreement will provide increased market space and access since Suzuki holds a dominant position in the booming Indian car industry.

“Toyota and Suzuki have agreed to work toward the early realization of a business partnership,” reads the joint press release.

In October 2016, both companies had stated they were exploring a partnership citing numerous technological challenges facing global auto manufacturers.

Suzuki had said it was struggling to keep pace with the speed to research and development in the tech race that is taking place in the automotive industry. It is here that Toyota, with its greater financial clout, can help it better cope with the industry’s tech demands.

Toyota has sunk in significant amounts in automated driving technologies, low emission cars and artificial intelligence.

Suzuki has since long sought a big brother partner: its alliance with Germany’s VW ended on a bitter note in 2015 with VW accusing Suzuki of violating their agreement by agreeing to develop a diesel engine with Fiat.

The deal could be a win-win situation for both automakers. Suzuki’s strong market presence is a great asset for Toyota, which can now build on Suzuki’s years of cultivated experience and tight supply chain network to tailor make vehicles for the local market.

“We would be happy to share lessons we learned from our experience in India and emerging markets with Toyota if they wish, to make this a win-win partnership for both parties,” said Yasuhito Harayama, Suzuki’s Vice Chairman.

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