Suzuki Motor and Toyota Motor to explore “business partnership”

Japanese carmakers Suzuki Motor Corp. and Toyota Motor Corp. announced last week that they have “agreed to start exploring ideas that are directed towards a business partnership.”

The environment surrounding the automotive industry has been changing drastically and rapidly in an unprecedented fashion, the two companies said in a joint statement.

“As such, the industry is required to work not only on conventional automobile R&D, but also on R&D for advanced and future technologies in the fields including environment, safety and IT. In addition to the R&D that is conducted by individual companies, it is increasingly important to work together with other companies on areas such as infrastructure development, as well as the establishment of new industrial standards.”

With its primary focus on mini-vehicles–together Suzuki and Daihatsu Motor Co., which is a Toyota subsidiary, hold a combined share of about 60% of the Japanese mini-vehicle market–Suzuki has been consistently refining its technologies so as to develop vehicles that are highly price competitive. However, in the face of the advanced and future R&D field, Suzuki is increasingly feeling a sense of uncertainty. On the other hand, although Toyota has been working on R&D in the environment, safety and information technology fields, Toyota is conscious of the fact that it may be behind competitors in North America and Europe when it comes to the establishment of standardisations and partnership with other companies.

The companies said that they have just started exploring opportunities for collaboration, with the belief that it will help both companies solve their respective challenges.

“This discussion is based on the prerequisite condition that both companies continue to compete with each other in a fair and independent manner. Toyota and Suzuki will also be open to other companies regarding this collaboration idea and aims for standardisation in the industry,” according to a joint statement.

Suzuki Chairman Osamu Suzuki said he first discussed the idea with Toyota’s Honorary Chairman Shoichiro Toyoda, “and am very grateful that President Akio Toyoda has also showed an interest.”

Toyoda said that “As the environment which surrounds the automobile industry has been changing drastically, we need to have the ability to respond to changes in order to survive. In addition to the R&D which each company is working on individually, it is very important now to have partners who share the same goal and passion. We would like to always keep doors open for new partnership opportunities, which will contribute to the making of ever-better cars as well as to the development of the automotive industry.”

Last year, Suzuki broke off its partnership with Germany’s Volkswagen AG, reportedly due to a culture clash. It is expected that with Suzuki and Toyota sharing similar backgrounds– both started in the same region and in the same business of automatic looms–the partnership might have a better chance of succeeding.

Toyota sells more than 10 million cars a year, while Suzuki sells more than two million.

Suzuki said that “We are determined to continue to operate as an independent company.”