Toyota, the giant automobile manufacturer, has an India-specific small car strategy in place, finally. Its India unit will source two cars which are manufactured by Maruti Suzuki, the Baleno, and Brezza, which majorly includes their hybrid variants, and in return, Toyota will offer its Corolla sedan to Maruti.
With the help of this mutual discussions, the two companies aim to strengthen their position in a car market that is touted to become one of the third largest globally by the year 2020. The carmakers had signed a business partnership in February 2017. In November, they said they would jointly develop vehicles which work on electric for the Indian market by 2020.
“By challenging and competing with each other with the goal of mutual improvement, Toyota and Suzuki aim to invigorate the Indian automotive market to further enhance their respective products and services to be offered to customers,” the companies said in a joint statement.
With the market share of 5 percent, under-utilized capacity, relatively smaller product portfolio and smaller network of sales, Toyota’s India unit are likely to be a bigger beneficiary of the mutual discussion deal. Maruti Suzuki, who has already gained more than 60% of Indian vehicle market in India and boasts of a large product portfolio, doesn’t seem to gain much from the deal.
Toyota has not been able to crack the small car segment in India, which is highly dominated by Maruti and Hyundai. It thrives on its SUVs cars of Innova and Fortuner and sedans cars of Corolla and Camry. Maruti has marked a successful presence in the mid-size sedan market with Ciaz but and has also benefited from Corolla.
The statement did not clarify the details of each model, supply pricing, schedule of supply, number of units, etc. But according to the report, Maruti Suzuki will supply Toyota more than 30,000 to 50,000 units of its premium hatchback Baleno and Vitara sports utility vehicle in a year, while on the other hand, Toyota will provide Suzuki with around 10,000 Corollas.
Last month, the two companies Mahindra and Ford India also signed a non-binding agreement to collaborate on latest technologies and with joint production development.