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Japan’s Toyota, Suzuki join hands in innovation war against US, EU

 PTI |  2016-10-13 23:05:15.0  |  New Delhi/Tokyo

Japan’s Toyota, Suzuki join hands in innovation war against US, EU

Japanese auto majors Toyota Motor Corp (TMC) and Suzuki Motor Corp (SMC) on Wednesday announced plans to explore business partnership to strengthen collaboration in fields of environment, safety, and information technology.

Both companies have agreed to start exploring ideas that are directed towards a business partnership, Toyota and Suzuki said in a joint statement.

Toyota and Suzuki just started exploring on any opportunities for collaboration, with the belief that it will help both companies solve their respective challenges, it said. “This discussion is based on the prerequisite that both companies continue to compete with each other in a fair and independent manner,” the statement added.

Through the partnership, the two companies, which have significant interest in India, are looking to address their weaknesses.

With its primary focus on mini vehicles, Suzuki - whose arm Maruti Suzuki is the largest carmaker in India - has been consistently refining its technologies so as to develop vehicles with high price competitiveness.

However, in the face of the advanced and future technology R&D field, Suzuki is increasingly feeling a sense of uncertainty, the statement said.

“On the other hand, although Toyota has been working on R&D in environment, safety, and IT fields, Toyota is conscious of the fact that it may be behind competitors in North America and Europe when it comes to the establishment of standardisations and partnership with other companies,” it added.

SMC Chairman Osamu Suzuki said: “I am appreciative that Suzuki is able to start discussions with Toyota to explore ideas on a partnership...We will proceed with discussions for the future of Suzuki.”

TMC President Akio Toyoda said as the environment which surrounds the automobile industry has been changing drastically, there is a need to have the ability to respond to changes in order to survive.

“In addition to the R&D, which each company is working on individually, it is very important now to have partners who share the same goal and passion. 

“We would like to always keep our doors open for new partnership opportunities, which will contribute to the making of ever-better cars as well as to the development of the automotive industry,” Toyoda said.

Citing drastic changing environment in the automotive sector in a rapid unprecedented fashion, the two firms said the industry is required to work not only on conventional automobile R&D, but also on R&D for advanced and future technologies in environment, safety, and IT fields.

In addition to the R&D that is conducted by individual companies, it is increasingly important to work together with other companies on areas such as infrastructure development, as well as the establishment of new industrial standards, they added.

Toyota and Suzuki will also be open to other companies regarding this collaboration idea, and aim for standardisation in the industry, they added. 

Mahindras’ S Korean arm to form JV to set up China plant

Mahindra Group’s South Korean arm Ssangyong Motor Co is forming a joint venture with China’s Shaanxi Automobile Group to set up a manufacturing plant in the world’s largest automobile market.

Ssangyong Motor Co, which was acquired by Mahindra & Mahindra in 2011, has signed a letter of intent (LOI) with the China’s Shaanxi Automobile Group for a joint venture that will establish local production plant for CBU vehicles as parts of its efforts to grow in China.

The proposed plant with an installed capacity of 3 lakh units annually in China will also be the first manufacturing unit of the company outside South Korea. “It is essential to have a local CBU plant in China to increase our competitiveness in the rapidly growing Chinese car market and to increase our sales volumes,” Ssangyong Motor CEO Choi Johng-sik said.

According to a regulatory filing by M&M, the proposed 50:50 JV will serve as a new growth engine for Ssangyong as the company continues its efforts to become a strong SUV manufacturer.

The first phase of construction will establish a plant with an annual capacity of 1.5 lakh units per year by the end of 2019 and the second phase will involve an expansion of the facilities to 3 lakh units annually.

“Furthermore, Ssangyong will establish an automotive cluster with its major suppliers that will also enter the market, to ensure product competitiveness and start the production of Ssangyong’s current models and models under development in the second half of 2019,” it said.

With the signing of the LOI, Ssangyong and Shaanxi Automobile will form a team to work on the Xi’an project and discuss the details for the establishment of a joint venture. Next steps will also involve obtaining regulatory approvals, the company said.

Established in 1968, Shaanxi Automobile Group manufactures trucks, buses, light commercial vehicles and pick ups among others. 

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