The two Japanese automotive manufacturers, Toyota and Suzuki, have announced another agreement under which they will share certain models in India along with sharing the hybrid tech. Under this new agreement, Maruti is going to supply the Baleno and the Vitara Brezza to Toyota, and the latter will be supplying the Corolla Altis to Maruti Suzuki. Earlier, in November, last year, these Japanese automotive giants had already announced a Memorandum of Understanding to create a joint strategy in order to introduce battery electric vehicles in the country by 2020.
According to the suggestion of the sources close to the matter, the aforementioned cars will be getting badges when they will go on sale in April or May 2019. So, it is expected that we are going to see the Vitara Brezza and the Baleno with Toyota badges and the Corolla Altis will be featuring Suzuki insignia. In order to differentiate the rebadged products from their parent brand, there are expected changes in the form of a grille update along with different upholstery and possibly to the dashboard as well, just the way it is visible on Nissan and Renault products like the Duster and the Terrano as per their collaboration.
To make it straight and simple, the Indian customers will be able to purchase Maruti Suzuki’s version of the Corolla Altis from any of the Maruti dealerships, more likely from a Nexa showroom as it is a chain of premium outlets of the brand. On the other hand, the rebadged Baleno hatch and the Vitara Brezza SUV will be available for purchase from a Toyota dealership.
The product sharing will help plug a vital gap in both the Japanese carmaker’s Indian line-up as Maruti Suzuki doesn’t have any presence in the sedan segment exceeding Rs 14 lakh as a premium offering and Toyota doesn’t have a Baleno or Brezza-like product in the compact SUV and premium hatchback segments. Both the automakers understand a possibility to utilize the platform of each other in order to build new products and capture the markets.
The sharing of the Altis’ platform with Maruti Suzuki will provide greater economies of scale for Toyota as the reach via Nexa will boost the sales further. For now, the bread and butter models for Toyota are the Innova Crysta and the Fortuner. These two don’t only share platforms, but are also consistently doing volumes in the excess of 7,000 units combined. Also, the other platform, on which the Etios range of cars is underpinned, does relatively more volume in comparison to the Altis. Moreover, it is going to only increase with the introduction of the Yaris as it will be sharing the underpinnings with the Etios.
It is already a known fact that Maruti is running a backlog for its Baleno and the Vitara Brezza which has got a further increase with the launch of the new Swift 2018. However, by the time of realization of this agreement, the second plant of Suzuki in Gujarat is going to be operational, which will be provding a capacity boost of 2.5 lakh per annum. On the other side, Toyota already has an installed production capacity of 3.10 lakh units per annum, but it sells only around 1.50 lakh in a year. With the realization of the new agreement, Toyota will be able to utilize its capacity better at the two assembly lines in Karnataka, thereby gaining economies of scale, which will be a win-win situation for both the Japanese giants. Toyota can also plan further research for compact cars and SUVs on both these platforms as it doesn’t have a product in the Indian line-up in this range.