toyato suzuki partnership

toyato motor corporation and suzuki motor corporation started a partnership in 2016 and signed an agreement in august 2019 for a capital alliance to establish and promote long term cooperation in new fields, including electric vehicle technology and autonomous driving. it was one of the most significant collabrations in the world automotive industry.

as a joint statement by the two companies has stated, under the capital alliance, toyato will acquire 4.94% stake in suzuki valued at 96 billion yen. at the same time, suzuki will buy a smaller stake (0.21%) in toyato worth 48 billion yen.

with indian being a major auto market and suzuki having the lion's share in the country through the maruti suzuki brand, it was expected to benifit the country's largest passenger car manufacturer, especially when it is aiming to grab a large chunk of the ev segment in india.

As per the Memorandum of Understanding (MoU) signed by the two Japanese auto giants at the global level in the indian market, toyato was supposed to share the HYBRID ELECTRIC VEHICLE (HEV) technology with maruti suzuki through local procurement of HEV systems,engines and batteries. on the other hand, suzuki was to supply two compact vehicles developed on the platform underpinning the ciaz and ertiga. 

 Maruti Suzuki and Toyota announced a partnership in 2017 with the aim of collaborating on technology, sharing vehicle platforms, and co-developing new cars. The partnership allows both companies to benefit from each other's strengths in areas such as electric vehicles, hybrid technology, and the development of new models. This collaboration is part of a trend in the automotive industry where companies are forming partnerships to share resources and expertise in order to stay competitive in a rapidly changing market. 

Hm, One of the most discussed (a bit controversial) topic, whenever either of a brand launches any new product!

This answer may be a bit lengthy, but I still try to make it understand as simple as possible!

• Rebadging cars is nothing new in India or in global market, some will do within their group of companies like Volkswagen-Skoda, some do due to their global alliance or by having some amount of share between each other, like Renault-Nissan!
• We all know Maruti Suzuki and Toyota Kirloskar Motors are Indian subsideries of their respective brands!
• The decision of rebadging is not taken by any of these subsidiaries!

( reason mostly they sell their products in their respective country and their neighbouring countries, even though if they are exported to other countries they won't be badged with their subsidiaries name, Eg: A Jimny exported from India may not have Maruti badge, rather they may only have Suzuki badging (Common sense😶)

• Even though they are manufactured in same plants (Eg: Baleno=Glanza at Maruti plant, Innova hycross= Invicto at Toyota plant), the decision of rebadging is taken by their main brands that is Suzuki-Toyota and not by their subsidiaries!
• And Toyota rebadges most of the Maruti cars like Baleno= Glanza (Again into Starlet in S.African Market), Vitara Brezza = Urban Cruiser, Ciaz= Belta (Global market), Ertiga= Rumion (Global market), Celerio= Vitz(S.African market)!
• Similarly Suzuki also rebadges some Toyota cars in European markets like Toyota Rav4= Suzuki A-Cross, Corolla station wagon= Suzuki Swace!
• So above mentioned products are just rebadged products, similarly they are planning to manufacture products developed by joint-venture by sharing technology and other aspects as we all know Suzuki is famous for their small petrol engines ( even though how much we criticise for their built quality) and Toyota for their hybrid systems!
• The first product co-developed by Suzuki-Toyota is Urban Cruiser Hyryder and Grand vitara, 

• Now the main reason why both the companies came into this joint venture or collaboration is to get a improve market share in their respective market, where it is less or just average!

  We all know, In India, Maruti Suzuki is the company with highest market share (Around 40%-45%), similarly Toyota good market share globally, but in India their market is only in the premium side that is above 25lks (Innova Crysta, Innova Hycross, Fortuner) and every other products launched by Toyota at a price range of below 10lks to 15lks are just flop or didn't sell well ( Eg: Etios, Liva, Yaris)!

  Similarly Suzuki, In India and in global market is known only for their small cars and they even don't have any bigger vehicles (that is Tata Harrier, Jeep compass segment and above)!

  • So the easiest way to capture market share is to get into a joint venture or collaboration with each other where they can share their products, just like some of the above mentioned products and also there is no R&D and other expenses!

  And I don't think that's a bad move, but they should think like what kind of products can be shared by each other, for eg: Glanza made a decent sales for Toyota, but same cannot be expected by Invicto for Suzuki as we all know the reason! ( minimal price difference, lack of features compared to original product and also lack of warranty offerd - 2years/40,000km in Suzuki as against 3years/100,000km in Toyota)

   

•  Maruti Suzuki has also been chasing a strategy to focus on the SUV segment in the country, after losing out early in the fight. To put it in perspective, India’s SUV market is one of the world’s fastest-growing markets, and is expected to grow to some 50 percent in the next few years. That means, one in every two vehicles sold in the country will be an SUV. Last year, India’s SUV sales overtook that of hatchbacks and sedans for the first time.

• “Toyota's portfolio lacked strong presence in certain segments like compact SUVs, where Maruti Suzuki dominates, “The partnership allowed Toyota to fill these gaps quickly by rebadging Suzuki models like the Vitara Brezza as the Urban Cruiser. This caters to a wider range of customer needs and preferences, boosting overall sales.”