Suzuki’s Huge Presence In India Was Main Incentive For Toyota Tie-Up

Toyota recently announced that it will invest $906.8 million in acquiring a 4.9 per cent stake in Suzuki. The official word from the two companies is that they will cooperate on the development of autonomous driving technologies and shared powertrains.

There is a little more to the partnership, however, Auto News reports. The likes of General Motors and Volkswagen have previously tried and failed to partner with Suzuki in a bid to expand their presence in the Indian market. Toyota is thought to be doing the same.

India is currently the world’s fourth largest market for new vehicle sales and is on track to surpass Japan for third place, which will place it behind only the U.S> and China. Suzuki’s local Maruti subsidiary accounts for roughly 46 per cent of new passenger vehicle sales in the country, so it’s easy to understand why it’s so attractive to others.

Also Read: Toyota Officially Seals Deal With Suzuki, Forms New Capital Alliance

Toyota president Akio Toyoda and Suzuki chairman Osamu Suzuki have been looking to strengthen ties between the companies since October 2016. Earlier this year, Suzuki agreed to supply Toyota with two compact vehicles for it to sell in India. Additionally, it will assign production of one of its SUVs to a Toyota factory in the country.

Toyota stands to benefit a lot from the tie-up, like learning how its partner has managed to engineer and produce low-cost vehicles for emerging markets and gain such a large market share. Then there’s the issue of autonomous vehicles and electrification, which both companies admit represents an turning point in the automotive industry.

“The automobile sector is currently experiencing a turning point unprecedented in both scope and scale, not only because of enhanced environmental regulations, but also from new entries from distinct industries and diversified mobility businesses,” they said in a joint statement. “To take up challenges together in this transitional era, the two companies plan to establish and promote a long-term partnership.”