scorecardresearch

Toyota, Suzuki to take on Korean might in SUVs

The two companies will start production of a new sports utility vehicle (SUV) developed by Suzuki at Toyota’s manufacturing facility at Bidadi in Karnataka, from August.

Japanese auto majors Toyota Motor Corporation and Suzuki Motor Corporation are deepening their collaboration beyond the cross-badged vehicles they currently offer. The two companies will start production of a new sports utility vehicle (SUV) developed by Suzuki at Toyota’s manufacturing facility at Bidadi in Karnataka, from August.

The joint initiative will strengthen their product portfolio in a segment which is currently driving passenger vehicle (PV) sales and where Korean manufacturers Hyundai and Kia have a strong presence.

FE was the first to report, in its May 23 edition, that a new SUV is being co-developed by the two companies to compete with Hyundai’s hugely successful Creta.

Suzuki’s Indian subsidiary, Maruti Suzuki India, and Toyota’s domestic arm, Toyota Kirloskar Motor (TKM), will market the new model in India as Suzuki and Toyota models, respectively, the two said in a joint statement on Friday.

The powertrains of the new model will be mild hybrid developed by Suzuki and strong hybrid developed by Toyota.“By bringing together the strengths of both Toyota and Suzuki through the collaboration, the two companies will be able to provide a wide variety of vehicle electrification technologies to customers and contribute to the acceleration of electrification and the realisation of a carbon-neutral society in India,” the statement added.

“Furthermore, the two companies are planning to export the new model to markets outside India, including Africa,” it said.At present, the SUV segment accounts for almost 40% of the overall domestic PV volumes. Within this, the share of compact SUVs is 22% and that of mid-size is of 18%.With only two models — Vitara Brezza and S-Cross — in its portfolio, out of the industry-wide total of 47, Maruti’s share in the SUV segment stands at around 12%.

Though Vitara Brezza is the leader in the compact SUV space, the company does not have a high-selling product in the mid-size segment. Its only product here, S-Cross, never was a volume leader and the company is phasing it out.In the last seven years, S-Cross sold merely 165,000 units, at an average of about 2,000 units per month.

In comparison, Hyundai, which launched the Creta around the same time, has sold about 700,000 units – at over 8,000 units per month.Not having a high-selling product in the mid-size SUV segment has pulled down Maruti’s market share from 51% in the PV segment in FY20 to 43% in FY22. Similarly, for TKM, the new SUV will fill the huge void between Urban Cruiser and Fortuner.

Including investment in expansion of collaboration in India, Toyota and Suzuki said they will remain committed to the achievement of the ‘Make in India’ initiative promoted by the Indian government and contribute to sustainable economic growth and to the vision of achieving net-zero greenhouse gas emissions by 2070.Commenting on the development, Toyota president Akio Toyoda said, “We are pleased to announce the new SUV with Suzuki, a company that has a long history of local involvement in the Indian business”. 

He said that today, the automotive industry is facing various challenges such as electrification and carbon neutrality. “By leveraging the respective strengths of Toyota and Suzuki to provide Indian customers with a variety of options, we hope to contribute to the reduction of CO2 emissions and realise a society where ‘no-one is left behind’ and ‘everyone can move freely’,” he added.

Similarly, Suzuki president Toshihiro Suzuki said, production of the new SUV at TKM is a project that can contribute to the growth of India through providing eco-friendly mobility needed by customers. “We recognise that it is a big milestone toward further deepening our collaboration in the future.

We appreciate the support from Toyota, and at the same time, will explore new synergy and business opportunities through continuous collaboration.”Toyota Motor Corporation and Suzuki Motor Corporation had signed a memorandum of understanding for a business alliance in 2017.

“Since then, the two companies have been bringing together Toyota’s strength in electrification technologies and Suzuki’s strength in technologies for compact vehicles for joint collaboration in production and in the widespread popularization of electrified vehicles,” the joint statement said.Under the partnership, at present TKM sells Suzuki’s premium hatchback Baleno as Glanza and compact SUV Brezza as Urban Cruiser in India.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Most Read In Industry Express Mobility