Toyota and Suzuki to join forces for electric vehicles and compact cars

Collaboration will help both marque's gain traction in burgeoning EV market

20 March 2019 - 17:45 By Reuters
The all-electric Toyota iQ EV.
The all-electric Toyota iQ EV.
Image: Toyota

Toyota Motor Corp and Suzuki Motor Corp on Wednesday said they planned to produce electric vehicles (EVs) and compact cars for each other to better compete with fast-changing technologies in the global auto industry.

The agreement follows an initial R&D tie-up announced by Japan's No. 1 and No. 4 automakers in 2017. It will see more vehicles produced by Suzuki for Toyota, one of the world's biggest carmakers.

Although Suzuki is far smaller, it is a dominant force in the fast-growing Indian market.

The two automakers have been pooling their strengths. Toyota is a leader in hybrid technology and is investing heavily in automated driving, while Suzuki specialises in affordable compact cars.

Many automakers have struggled to keep pace with ballooning investment in EVs and self-driving cars.

Under the latest agreement, Suzuki will source petrol hybrid systems for cars it sells worldwide from Toyota, which pioneered hybrid vehicles with the Prius more than 20 years ago, the companies said in a joint statement.

In return, Suzuki will produce two compact models for Toyota in India, based on its Ciaz and Ertiga models.

Further cooperation with Suzuki will help Toyota expand its presence in India, the world's fifth-largest passenger car market, where it has struggled to grow sales due to lean demand for its lower-cost models.

The deepening partnership between the two automakers will enable cost-conscious Suzuki to tap into Toyota's R&D firepower to develop lower-emission vehicles and self-driving cars - areas in which Suzuki has admitted it is struggling to keep up.

"We believe that the expansion of our business partnership with Suzuki ... will help give us the competitive edge we will need to survive this once-in-a-century period of profound transformation," said Toyota president Akio Toyoda in a statement.

The two automakers will deepen their cooperation in India, where Suzuki's hybrid vehicles will be made using engines and batteries produced locally by Toyota.

They will also join forces in Europe, where Toyota will produce electric vehicles based on its RAV4 SUV crossover and Corolla wagon for Suzuki, while Suzuki will supply Toyota with petrol engines for compact vehicle models sold in the region.

In the UK, a vehicle based on the Corolla Wagon platform will be built at Toyota's Burnaston plant, while engines will be made at the firm's Deeside factory, a bright spot for a sector hit by Brexit uncertainty in the last few months.

For the African market, Suzuki will produce its Baleno, Vitara Brezza, Ciaz and Ertiga models for Toyota, which will be rebranded and renamed as Toyota models.