The bond between the Indian arms of two Japanese automakers, Toyota and Suzuki, is going to be further strengthened through collaboration in the vendor development area too, as per a report in the Live Mint.
Since 2017, Toyota Kirloskar Motor Pvt Ltd (TKM) and Maruti Suzuki India Ltd have joined hands to carry on a number of joint activities and helping each other out. The latest is that Kirloskar will want to tap into the strength of Maruti Suzuki’s vendor base that can make supplies at economical costs for its new models like the Innova Crysta MPV expected to be released in 2021-22.
This may mean Toyota Kirloskar may drop some of its existing vendors and switch over to the ones making supplies to Maruti Suzuki. In fact, some say this has already happened and a few vendors have been dropped by Toyota in the recent past.
The main intention of TKM appears to be to cut its production cost. Observers say Toyota Kirloskar has been studying the Maruti Suzuki model of low-cost production that enables the company to churn out vehicles in millions and retain around a third of the Indian passenger car market.
The 2017 association between Maruti Suzuki and Toyota Kirloskar envisaged the two Japanese companies working together to develop affordable hybrid and electric vehicles for the Indian market. Toyota was to share its hybrid technology with Suzuki.
This was further expanded when they decided to sell each other’s vehicles and to export their cars. Subsequently, the two Indian companies have invested small stakes in each other.
This new development where TKM will try out some of the vendors of Maruti Suzuki to source components for its vehicles will enable the companies to work together even more closely. Where there are common purchases like tyres and batteries etc., there may be joint ordering to save on costs through higher volumes.