Japanese carmakers Suzuki and Toyota have extended their alliance, as part of which both the companies will share more models, jointly develop hybrid and electric vehicles for India and the global markets, besides exchanging engines and technologies.

Under the latest agreement, Maruti Suzuki will supply its sedan Ciaz and MPV Ertiga to Toyota in India and Africa, in addition to the already agreed supplies of premium hatchback Baleno and compact SUV Vitara Brezza.

In return, Toyota will provide Suzuki its hybrid electric vehicle (HEV) technologies in India through local procurement of HEV systems, engines and batteries. Toyota will also supply its THS (Toyota Hybrid System) to Suzuki in the global markets. The two carmakers will jointly develop a new Toyota C-segment multi purpose vehicle (MPV) that will be supplied to Suzuki, the companies said in a joint statement.

The partnership between the two carmakers will help cost-conscious Suzuki to tap into Toyota’s strength in electric and hybrid technology where, Suzuki is struggling to keep up. The companies, however, did not disclose the timeline as to when the vehicles will be exchanged.

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Toyota President Akio Toyoda said hybrid technologies are seen as playing a huge role in many markets. “We look forward to the wider use of hybrid technologies, not only in India and Europe, but around the world,” he said.

Outside India, Toyota will supply two new electrified vehicles to Suzuki in Europe and Suzuki will supply Toyota with petrol engines for compact cars to be sold in Europe. Suzuki will also supply its India-produced vehicles – Baleno,Vitara Brezza, Ciaz and Ertiga – to Toyota for the African market as well. Even though Toyota is the largest vehicle manufacturer in Africa, it’s expertise is limited to bigger utility vehicles and sourcing small car engines from Suzuki’s will help Toyota in expanding its portfolio.

According to an agreement signed in March last year, while Suzuki will supply Baleno and Vitara Brezza to Toyota, the latter would supply its sedan Corolla to Suzuki. Toyota’s version of the Baleno hatchback will go on sale this year, while Vitara Brezza will be manufactured at the Toyota’ plant in Bidadi, Karnataka, from 2022. It is unknown by when will Toyota lend its sedan Corolla to Suzuki, but sources said it will happen in 2020.

Analyst said both the companies will benefit equally as Toyota has the technology for hybrid and electric cars and Suzuki has the expertise in developing low-cost cars. “Suzuki’s expertise in small cars is certainly is plus. If Toyota wants to make any dent in the segment, they would need Suzuki not only for the Indian market but for global markets as well, VG Ramakrishnan, managing partner, Avanteum Advisors, told FE.

Suzuki chairman Osamu Suzuki said his company has seen progress in the partnership with Toyota since it was announced last year and this led to Toyota offering to use their hybrid technology. Toyota’s Toyoda said the partnership with Suzuki will help in giving competitive edge.

In February 2017, Toyota and Suzuki concluded their agreement and since then, have been exploring concrete projects for collaboration in areas including environmental and safety technology, information technology, and the mutual supply of products and components.

Subsequently, the companies announced an MoU to consider a cooperative structure for introducing battery electric vehicles in India around 2020.