Tie-ups within the Indian passenger automobile area have not likely labored. Although a lot of them have been introduced with nice fanfare, they have been dissolved in a brief span of time. In reality, not one of the alliances resulted in a profitable product throughout its tenure.
Whether it was the Mahindra & Mahindra-Renault alliance of 2007, the Tata Motors’ pact with German producer Volkswagen in 2017 or the Ford and Mahindra tie-up in 2019, they did not ignite the market with any product, and have been finally referred to as off.
The tie-up between Japanese auto majors Toyota Motor Corporation and Suzuki Motor Corporation, in 2017, nonetheless, has not solely survived however is prospering because it has gone past cross-badging of automobiles to now producing compact SUVs, a phase which is at present driving the passenger automobile market within the nation.
Toyota Kirloskar Motor now sells two Maruti Suzuki fashions in India – Glanza and Urban Cruiser — rebadged variations of the Baleno and Vitara Brezza. On July 1, it unveiled the Urban Cruiser Hyrder, its first midsize SUV for India that has been constructed collectively with Maruti Suzuki.
Automotive analysts say the Suzuki-Toyota alliance is not going to solely work however will go a great distance due to the synergy in addition to a shared enterprise tradition.
Som Kapoor, EY India automotive, way forward for mobility chief (consulting), and accomplice, instructed FE, “Both are Japanese companies, the tie-up happened at the headquarter level, and most of it is getting implemented in India. Maruti Suzuki doesn’t have full hybrid electric vehicle technology, which Toyota has. Also, Toyota isn’t as strong as Maruti Suzuki in small cars.” According to him, each solely have to realize from one another.
Another skilled identified that earlier automotive partnerships failed as a consequence of some disconnect between the companions. “In the case of Mahindra and Ford, the priorities weren’t aligned. Mahindra is traditionally a low-cost manufacturer, and for Ford, the cost of manufacturing was going to be much higher. They couldn’t work out a middle ground. Almost similar was the case with the Tata-Volkswagen tie-up,” he stated.
Suman Jagdev, accomplice, automotive, Praxis Global Alliance, instructed FE that the success of partnerships lies in its complementarity. “Toyota is clear that this tie-up will help improve its sales in India because it will get access to Suzuki’s extensive after-sales network and be able to provide the ‘Toyota service quality’ at the lower end of the market. This tie-up also brought together Toyota’s strength in electrification and Suzuki’s strength in compact vehicles, and both could produce compact electric cars,” he stated. “Essentially, in this case, clearly articulated objectives led to the eventual success of the partnership.”
Toyota Kirloskar Motor launched the Glanza on June 6, 2019, and the Urban Cruiser on September 23, 2020. In nearly three years, it has offered greater than 110,000 items of each the fashions put collectively. Of these, greater than 65 per cent Glanza prospects are first-time Toyota consumers, and a whopping 95 per cent of Urban Cross SUVs have been purchased by non-Toyota prospects.
“Both these cars have given TKM an entirely new set of customers, who may not have otherwise entered the Toyota family because TKM earlier didn’t have a car at a price point they could buy,” Tadashi Asazuma, govt vice-president, gross sales and customer support, TKM, just lately instructed FE.
A Toyota supplier from Delhi-NCR added that despite the fact that the Indian buyer is aware of that the Glanza and the Urban Cruiser are rebadged Maruti Suzuki automobiles, “she is able to enter the Toyota family at a lower price point”.
This partnership is predicted to finally manufacture compact electrical automobiles for India in addition to for export market.
Earlier this yr, Suzuki Motor Corp confirmed an funding of Rs 10,440 crore in India to strengthen its electrical automobile plan, and can roll out its first electrical automobile constructed at its Gujarat plant by 2025. This made-in-India electrical automobile shall be offered as a Maruti Suzuki in addition to a Toyota mannequin in India, together with worldwide markets.