Maruti and Toyota

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MS-Toyota Alliance: A tale of “You scratch my

back, I scratch yours”

Critical News Analysis


Automobile Sector in India: Current Scenario
● 14.50% Registered growth in exports during APR-MAR 2019.
● Growth in exports by 17.1%, from $13.50 Billion -> $15.16 Billion, despite low
domestic demand.
● Declension in sales of passenger vehicles by -9.64%.
● Introduction of BS-VI emission norms for all vehicular norms.
● Current shift from fuel-based automobiles to hybrid electric vehicles.
BS-VI Standards

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MS-Toyota Alliance: A Strategic Handshake
● Firms will share development of HEV’s and powertrain tech along with
platforms.
● Toyota will share HEV’s with Maruti-Suzuki and develop their systems,
engines and batteries.
● “Capital alliance” for equity between Toyota and Suzuki.
● Cross-Badging situation between Maruti-Suzuki and Toyota
Role of Role of Suzuki The Partnership
Toyota
R&D in the HEV model and Supplying powertrain Direct production & sales
prototypes for Suzuki technology to Toyota benefit for Maruti in India

● Share HEV tech in India ● Ciaz and Ertiga model to be


● Supply 2 electrified vehicles supplied in India ● Developing C-segment MPV
● Supply Made-in-India Ciaz, in India with Suzuki's
to Suzuki to be built for EU
Ertiga, Brezza and Baleno to expertise.
● Supply hybrid systems and African markets ● Manufacturing Toyota
battery tech. to Suzuki ● Supply powertrain tech. to badged Vitara Brezza in
Toyota for EU markets. Karnataka from 2022.
Chairman’s Opinion

RC Bhargava: Akio Toyoda:


Maruti Suzuki Toyota

● Maruti gains tech ● Alliance represents


advantage and a step forward in
Toyota gains multinational
economies of scale. growth.
● Millions of dollars ● Suzuki is a
saved at company that puts
operational costs into practice the
Best in town”
Benefits
● Through this partnership, Toyota acquires the ability to produce more
compact HEV’s, benefitting Maruti to achieve head on tech. Advantage with
Toyota.
● Maruti to meet its CAFE norms by 2022-23.
● Partnership can potentially add half a million units to both Toyota and
Suzuki globally in the coming decade.
● Economies of scale will ensure more accessible, cleaner mobility solutions
in the form of HEVs.
Future Predictions
● Half a dozen new products priced in the sub Rs. 12L lined up for coming 3-4
years, a portfolio of HEV vehicles ready to cater 80% of the market.
● Re-designing and re-engineering versions of Vitara Brezza and Wagon R in
2020, Ciaz in 2021 and Ertiga in 2023 for sale spikes.
● Revamping Innova and Fortuner by Toyota.
● Anticipated strategic alliance with Tesla for R&D in NMC-type Li-ion
batteries to be brought for Indian automobile sector.
Toyota-Suzuki Car Deal: A Boon or Bane?

Ambiguous investor Govt. support to push


Sales cannibalization of
sentiments on future reforms on clean fuel
Maruti’s premium cars
investments vehicles
Maruti is
in
trouble

Fight for
Strategic
Toyota’s
Coalition
survival

KIA’s
Zero HEV and
Sum Hybrids
game
Turf
between
KIA and
MG
Thank you

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