Toyota, Suzuki agree to produce cars for each other in India

TOKYO (Reuters) - Toyota Motor Corp and Suzuki Motor Corp on Thursday agreed to produce cars for each other in India as Toyota aims to increase its market share in the fast-growing country dominated by its smaller rival.

The agreement, which follows an R&D partnership announced by the two Japanese automakers a year ago, will see Toyota secure production from Suzuki. The latter dominates India with its line-up of affordable compact cars, while Toyota has struggled to expand its presence in the market due to lean demand for its models.

Suzuki will supply gasoline and mild-gasoline hybrid versions of its Baleno hatchback, along with Vitara Brezza compact SUV to Toyota, while the latter will produce gasoline and gasoline-hybrid Corolla sedans for Suzuki, the automakers said.

Under the deal, the vehicles manufactured by Suzuki will be rebranded and renamed as Toyota cars, while the Toyota vehicles will sport the Suzuki badge.

The manufacturing will start mid-2019, a Toyota spokeswoman said, while declining to give details on production figures.

Earlier in the day, the Nikkei business daily reported that Toyota would supply around 10,000 vehicles to Suzuki, while Suzuki would produce up to 50,000 units annually for the Japanese automaker.

Suzuki has dominated the Indian automobile market through a majority stake in Maruti Suzuki India Ltd, the country's largest automaker, which makes one in every two cars sold in the country.

Toyota lags far behind with a roughly 5 percent market share in India. Last year, it sold roughly 140,000 cars, leaving its two India plants to operate at about half their capacity of manufacturing more than 300,000 vehicles a year.

(Reporting by Naomi Tajitsu; Editing by Richard Pullin and Sherry Jacob-Phillips)