Japanese auto majors Toyota Motor Corporation (Toyota) and Suzuki Motor Corporation (Suzuki) Thursday said the companies have concluded a basic agreement toward the mutual supply of hybrid and other vehicles for the Indian market.
The companies stated that Toyota will provide about 10,000 its hybrid and gasoline Corolla sedans to Suzuki, which in turn will produce 30,000 to 50,000 units annually of its compact Baleno hatchback and Vitara Brezza compact sport utility vehicle (SUV).
For the vehicle models covered by the basic agreement, the two companies will increase their efforts to procure components locally to the extent possible toward the achievement of the "Make in India" initiative promoted by the Indian government. Under the terms of the agreement, cars built by Suzuki will be rebranded and renamed as Toyota vehicles, while Toyota's will have the Suzuki badge on them.
All the vehicles will be made in India.
These models will be sold by the respective Indian subsidiaries of Toyota (Toyota Kirloskar Motor) and Suzuki (Maruti Suzuki India) through their sales networks, it added. Producing 50,000 vehicles for Toyota would represent just a sliver of what Suzuki sold in India in 2017. The duo formed a partnership in February 2017 to explore joint projects and stated in November that they plan to launch jointly developed electric vehicles in India around 2020.
Last year, Toyota sold roughly 140,000 cars in India, leaving its two plants in the country to operate at about half their capacity of manufacturing more than 300,000 vehicles a year.
Given the fact that the Maruti Suzuki and Toyota are two of the strongest automakers in the Indian market, the new partnership between the two is likely to have a big impact on the local vehicle industry. An additional 50,000 units could push Toyota's annual sales above those of Honda Motor and Tata Motors, but it will still lag far behind the top three manufacturers - Suzuki, Hyundai Motor Co and Mahindra & Mahindra.
"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", the statement said.
In the past, Toyota had looked to Daihatsu for help to develop affordable, competitive cars in India.