NAGOYA (Reuters) - 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, and 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 specializes in affordable compact cars — as many automakers struggle to keep pace with ballooning investment in EVs and self-driving cars.
Under the latest agreement, Suzuki will source gasoline 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 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,” Toyota President Akio Toyoda said in a statement.
The two automakers will deepen their cooperation in India, where Suzuki’s hybrid vehicles will be made using engines and batteries locally produced 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 gasoline engines for compact vehicle models sold in the region.
Suzuki will also produce its Baleno, Vitara Brezza, Ciaz, and Ertiga models for Toyota which will be rebranded and renamed as Toyota models for the African market.
Reporting by Naomi Tajitsu; Editing by Simon Cameron-Moore