Toyota Motor Corp and Suzuki Motor Corp announced on Monday their plan to trade parts supply and R&D expertise. This agreement will help further their respective expansion into emerging markets and reconcile themselves with rapidly growing technological sophistication.
In a joint statement, the companies said, “Toyota and Suzuki have agreed to work toward the early realizations of a business partnership.” They also singled out procurement, environment, and safety technology as possible areas of cooperation.
Toyota could stand to benefit from Suzuki’s supply chain, which has helped the latter dominate the massive auto market in India. Suzuki, in turn, could also benefit from access to Toyota’s innovations in automated driving, artificial intelligence and low-emission vehicles.
This partnership agreement comes four months after Suzuki announced its struggle to keep up with research and development in the current auto industry, which continues to simultaneously explore non-petrol engines and self-driving vehicles. Japan’s fourth-biggest automaker has yet to announce any major strategy in those areas.
Toyota, though in possession of the necessary financial power to keep up with technology, has struggled to win share in India. In that market, the world’s second largest automaker falls behind the more popular, compact cars manufactured by Suzuki.
Senior Managing Officer Shigeru Hayakawa announced at an earnings briefing, “There’s a lot we can learn from the speed at which Suzuki operates and implements changes.”
Through a majority stake in Maruti Suzuki India Ltd., Suzuki makes every other car sold in the country. Access to this chain could help Toyota manufacture cars tailored to consumer preferences in India.
Suzuki Vice Chairman Yasuhito Harayama expressed willingness to move forward with the partnership in a quarterly earnings briefing, “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.”
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