Toyota and Suzuki: Starting discussions for a business alliance

Partnership in environmental friendliness, safety, and information technology

2016/11/04

Summary
Aims underlying the business partnership: Creating allies and developing advanced technology
Toyota's partnerships: Daihatsu, Fuji Heavy Industries, Mazda, BMW, and PSA
Toyota and Suzuki's market share in major Asian markets
(Source) Toyota and Suzuki FY 2016 plans

Summary

President Toyoda and Chairman Suzuki at the press conference (photo: Toyota)

Akio Toyoda, President of Toyota Motor Corporation, and Osamu Suzuki, Chairman of Suzuki Motor Corporation, held a joint press conference on October 12 2016 at a conference room in Toyota's Tokyo headquarters to announce that the two companies have "agreed to begin discussions towards establishing a cooperative relationship".

Both OEMs will strengthen their cooperation in the fields of environmental friendliness, safety, and information technology. The backdrop for this agreement is that initiatives to develop cutting edge technology such as next-generation environmentally friendly vehicles, autonomous driving, and connectivity are advancing at unprecedented speeds. Moreover, there is an increasing need to coordinate with other companies to establish new rules.

The automakers explained their respective issues, with Toyota stating it has fallen behind in comparison to European and American OEMS in making alliances and developing standards, and Suzuki noting that although it has consistently refined its techniques in developing automobiles with high price competitiveness, it has problems in developing advanced and future technology, and sees this as a danger.

Specific fields in which the two companies will cooperate, as well as capital alliances are yet to be discussed. The purpose of this announcement was to inform stakeholders and the industry that the two companies are considering an alliance. Being that both automakers were established relatively in close proximity to one another and the founding families are on good terms, an alliance between the two OEMs has been rumored for a long time.

In August 2016, Toyota took full ownership of Daihatsu and is also the largest shareholder in Fuji Heavy Industries (FHI, the maker of Subaru vehicles) with a 16.5% stake. The OEM also announced an alliance with Mazda in May 2015. As a result of this, Japanese OEMs are now split into three camps: Toyota Group, Suzuki, and FHI; Nissan and Mitsubishi; and Honda.