Toyota and Suzuki take hybrid route to co-develop a mid-sized SUV

Toyota to launch the Hyryder on July 1; Maruti's version is expected in August

The five-year-old alliance between Japanese auto majors Suzuki and Toyota is all set to launch its first model for which the latter has provided hybrid technology. The mid-size hybrid SUV is for India and select global markets and will be produced at Toyota’s Bengaluru plant. The production will start in August.

As part of the alliance, Toyota currently sells Maruti Suzuki’s Baleno as Glanza and Vitara Brezza as Urban Cruiser.  

For Maruti Suzuki, the model is critical in its struggle for regaining the lost ground in the SUV segment from rivals Hyundai, Kia, and Tata Motors. The SUV segment is the fastest-growing portfolio in India’s auto market.  

Dragged down by SUVs, Maruti's share in the passenger vehicle market dropped to an 8-year low of 43 per cent at the end of FY22, from 50 per cent-plus a couple of years ago. Amid a high-cost structure and a few successful models, it's equally important for Toyota, which has been a fringe player in India with less than 5 per cent market share.

“It is a mid-size SUV. The powertrain will have a mild hybrid developed by Suzuki and a strong hybrid which is being developed by Toyota,” confirmed Shashank Srivastava, executive director sales at Maruti Suzuki. He added that by bringing together their strengths, the two companies “will be able to offer a wide variety of electrification technologies and accelerate the electrification journey of mobility in India”.

The model has been developed by Suzuki.

Though the SUV has been designed primarily to be sold in India, it will be exported to markets like Africa. Toyota’s version of this new SUV will be called the Urban Cruiser Hyryder, which the company is launching on July 1. Sources said that Maruti will soon launch its product, which is likely to be called Vitara.

For Maruti Suzuki, this SUV will directly compete against the models of South Korean sister brands — Hyundai’s Creta and Kia’s Seltos. Hyundai was the market leader in the SUV segment in 2020 and 2021 with almost 23 per cent share of the market.

"This and various other new models that one shall see in the coming months from the collaboration will give buyers a range of competitively priced hybrid models to choose from and this could be a potential game-changer," said Puneet Gupta, director, S&P Global Mobility and Automotive Sales Forecasting. With intensifying competition and the policymaker's green technology push, it's likely to give the Japanese duo an edge over rivals, he stated.

Toyota and Suzuki first came together in 2017 to develop affordable hybrid, ICE (internal combustion engine models), and electric vehicles for the Indian market.

Subsequently, Toyota agreed to supply its hybrid technology to Suzuki. The two companies later agreed to sell each other’s products in India and overseas markets. In 2020, they deepened their ties by buying small stakes in each other.

Toyota has also launched the rebadged version of the Suzuki Ertiga in South Africa as the Rumion. The Belta in the Middle East market is a rebadged version of Maruti’s sedan Ciaz.

“By leveraging the respective strengths of Toyota and Suzuki to provide Indian customers with a variety of options, we hope to contribute to the reduction of CO2 emissions,” Toyota President Akio Toyota said.

“We appreciate the support from Toyota, and at the same time, will explore new synergy and business opportunities through continuous collaboration,” said Toshihiro Suzuki, president at Suzuki.

Auto companies globally have been forging alliances and collaborations as they race to stay on top of the latest technological trends. These tie-ups are being driven by the need to speed up the development time of new technologies and share the cost burden. 

Ford Motor Company and the Volkswagen group have a partnership for e-mobility. Ford recently expanded the scope of the alliance by announcing plans to produce another electric model for the European market based on VW's MEB platform. In India, Mahindra and Mahindra recently announced an agreement it inked with the Volkswagen group to collaborate on electric vehicles.

Analysts tracking the sector have said that the partnership between the Japanese auto majors has been mutually beneficial for both. SBI Caps said that through this partnership, Maruti has hedged its need for technology from Toyota’s massive R&D capabilities and current technological know-how.

The partnership has also led to growth in the company business in Africa and Latin America, where Toyota sells the rebadged models, resulting in Maruti’s export volumes consistently averaging above 20,000 per month. Toyota, on the other hand, gains handsomely from Maruti Suzuki’s production strength in the country.

On the road, together
 

Oct 2016:  Suzuki and Toyota announce that they shall explore ideas directed toward a business partnership

Feb 2017: The two sign MoU to partner in areas of environmental, safety and information technologies, and supply of products and components

Nov 2017: They sign a cooperative structure for introducing EV in the Indian market by 2020

Mar 2018: Agreement for mutual supply of hybrid and other vehicles between the two companies for the Indian market

Aug 2019: Toyota and Suzuki announce capital alliance for equity investment into each other

Aug 2022: They launch co-designed hybrid SUV for the Indian market

At present, Toyota sells Suzuki's premium hatchback Baleno as Glanza and compact SUV Brezza as Urban Cruiser in India