Suzuki Motor Corp and Toyota Motor Corp informed on Monday that they were going to trade expertise in their R&D and parts supplies. Companies will arrange the agreement which will let them to expand in emerging markets and withstand a brisk technological sophistication process.
Deal conditions will likely make Toyota gain a benefit from Suzuki supply chain and reach dominant position in India’s huge auto market. On the other hand, Suzuki will get an access to innovations of the second deal participant, including low-emission vehicles, automated driving, and artificial intelligence. The companies’ joint statement indicates that they are going to cooperate in development of environmental technology and in the safety and procurement related tech. However, they are not going to conduct a capital tie-up, at least, for now.
The companies’ cooperation was marked approximately four months ago, when Suzuki representatives mentioned that the fourth biggest automaker of Japan was trying to retain its positions in R&D industry sector along with non-petrol engines and development of self-driving vehicles technologies. Meanwhile, Suzuki company was the owner of Maruti Suzuki India Ltd (a major part of it) and had a local chain of automobile parts supply, which was developed over 30 years ago. An access to this chain will give Toyota an ability to expand in the market of India. The country’s market is expected to become third in the world till 2020.
For Toyota company, it is also a possibility to gain an access to Suzuki’s low-cost design and bring cars with the competitive price lower than $7,000 to the market. In addition, development of the supply chain competitive with Suzuki’s one is treated as too time-consuming. Meanwhile, in some analysts opinion, the agreement will likely restrict Suzuki independence and an access to Toyota technologies.