News & Analysis

Toyota-Suzuki JV Could Help Them Ride the Recession


If we are to believe the data released by the government which revealed the country’s GDP falling to a six-year low of 5 per cent in the first quarter of the current fiscal, we are positioned in an economic slump or a slowdown. While some do not acknowledge it openly, but industries are getting affected and the reduction in production and downsizing of workforce is the brutal reality.

As Rajan Wadhera, President, Society of Indian Automobile Manufacturers (SIAM), said in a chat with the Economic Times, a million contractual manufacturing jobs are at risk due to the consumption slowdown. Every second day is highlighting the news of huge brands either going bankrupt and shutting down or partnering with the competitor.

Within the last 10 days itself, we went through business alliances of four major players- Oracle & Microsoft and Toyota & Suzuki. Does this not make us ponder if alliances are called upon in the wake of economic slowdown?

Understanding Toyota-Suzuki Alliance

A report published by The HinduBusinessLine, says that while the Japanese brands are going to make the most of pooling skills for production, sourcing etc., the two are going to remain the fierce competitors on the front end.

The article quoted Managing Director of Toyota Kirloskar Motor (TKM), Masakazu Yoshimura to say that the collaboration between the two auto giants will intensify in the coming years and there is a lot of learning to do from each other.

While Suzuki focuses on smaller cars and Toyota on bigger ones, the two share pleb for intense customer focus. The alliance of two is going to put emphasis on the development of human resources. The two big names acknowledge the changing customer tastes and hence, are striving to work in new areas like electrification, and autonomous driving.

Sharing his philosophy, Yoshimura says, “Loving Toyota is good but that shouldn’t mean I hate someone else. That kind of mentality must go since all of us are in the same industry to serve the customers.” The two Japanese brands are looking at a win-win situation by swapping machines, ideas and people.

A Perfect Alliance to counter Economic Slowdown?

We are probably witnessing the changing business trends where alliances are perhaps topping the trends. As technologies are changing businesses, the companies are perhaps becoming open to sharing each other’s unique strengths in order to garner more profits. However, is the situation same with the current Indian market? The Indian market’s auto sector is witnessing a slowdown with the domestic sales continuously going down.

Amidst this, can we really say that Toyota-Suzuki alliance is just to amount more profits? Couldn’t it be because of the falling sales in the Indian market and the two brands wanting to cut their production cost while sharing each other’s resources? The alliance could be the need of the hour if they both want to sustain in the Indian market and not die out like Thomas Cook, a 180 year old travel agency. The thought leaders and the industry experts perhaps need to look at the situation from a different lens to understand it better.

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