Toyota’s Partnership with Suzuki Is Because of India

Toyota USA
The Toyota logo is seen on a new Corolla model at the 89th Geneva International Motor Show (Photo: Reuters)

Toyota partnered with Suzuki and puzzled many. Many could not help but ask why.

Companies such as General Motors and Volkswagen have in the past, partnered with Suzuki. Now Toyota is doing it too. But why? Is this a trend? There is a good reason here.

According to Carbuzz, the deal will involve Toyota purchasing a small share in Susuzi and vice versa. By doing so, they can work together is penetrating new fields, which benefit them both.

Toyota says in a statement that the partnership will allow for "collaboration in new fields, including the field of autonomous driving." If successful, there is no doubt that Suzuki and Toyota can both be better off. Their collaboration will eventually lead to the building of Suzuki-badged vehicles. Toyota will have personal gains over this partnership too.

According to Automotive News, this partnership will allow Toyota to be more successful in India. At present, it is very behind compared to Suzuki and Hyundai when it comes to market share in India. The partnership can boost Toyota's presence and sales in this crucial market.

There is no secret benefit here. Even before this deal was even announced, both Toyota and Suzuki were already negotiating on how to be more successful in the Indian market. Earlier this year, Suzuki eve promised to build two Toyota-badged compact vehicles solely for the Indian market. It also promises to build a Suzuki compact SUV, but in a Toyota plant. Toyota and Suzuki also promised to collaborate and promote hybrid vehicles for Toyota.

In other words, the deal is not merely for Toyota to follow some form of a trend, nor is it for Suzuki's benefit. Toyota has plenty to gain, but of course, this is not without its own hard work. Emerging markets such as India is not that hard to penetrate and be competitive in, so Suzuki will be a good mentor.

Suzuki and Toyota's alliance is raising a few eyebrows because the two did not always have a smooth relationship. As reported by Nikkei Asian Review, it can be remembered when Hiroshi Okuda became Toyota's president back in 1995, he criticized Suzuki Motor for taking advantage of the then quite favorable tax rules to boost domestic sales while putting Toyota and other big brands at a disadvantage.

Still, it can also be recalled that Toyota already saved Suzuki Motor several times. A labor dispute in 1950 almost ruined Suzuki had not Toyota extended a loan. In the 70s, when Suzuki Motor had difficulties meeting new emission standards, Toyota provided Suzuki with Daihatsu engines.

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