Toyota's tech, Suzuki's consumer expertise driving alliance in India

Two companies have identified fossil fuel reduction as common objective: TKM's Maru

Toyota’s technological expertise, Suzuki's deep understanding of the Indian consumer, and their shared commitment at reducing fossil fuel consumption are key to the success of their alliance in India, according to Swapnesh Maru, deputy managing director (Corporate Planning and Greenfield Projects) at Toyota Kirloskar Motor (TKM).

 

TKM, the Indian subsidiary of Toyota Motor Corporation (TMC), and Maruti Suzuki India (MSIL), the Indian arm of Suzuki Motor Corporation (SMC), formed a global alliance in 2018-19. 

Maru emphasised the importance of shared corporate objectives, noting that alliances based on business interests may succeed for a time but lack the depth needed for long-term success. 

“Any alliance that has just business as its base will do fine so long as there are shared monetary benefits. That’s one way and that’s perfectly fine. Without that, no alliance can exist. However, on top of that, I think a larger corporate objective — a bigger problem that has to be solved — has to be decided,” Maru told Business Standard.

  He pointed out the two companies have identified fossil fuel reduction as their common objective.

  “To address this issue, the mindset must be that the challenge is greater than any individual or collective gain or pain. With transparency and trust, alliances work. This is also because we are not focusing on the immediate outcome. We are looking at what we can solve together towards an objective,” he added. 

He mentioned that trading models —one company selling rebadged models of another company — in an alliance is operational and it can stop the moment one of the partners has a “bad experience”. 

 

India’s transition to sustainable energy, especially given the country’s energy affordability challenges, requires speed, scale, and collaboration, he stressed. 

  “No single company or technology can drive this change alone. It requires like-minded partners working together towards a common goal.”

  TKM currently sells four rebadged models from MSIL — Glanza (from Baleno), Urban Cruiser Taisor (from Fronx), Rumion (from Ertiga), and Urban Cruiser Hyryder (from Grand Vitara)—which contribute significantly to the company’s sales.

  The first cross-badged model from TKM to MSIL, the Invicto (from Innova Hycross), was introduced in FY24. 

Maru credited the success of the alliance to the synergy between Toyota’s technological strength and Suzuki’s deep market insight. 

“I think Toyota has always been strong in terms of technologies, including sustainable technologies. Suzuki's stronghold in India is by being extremely customer-focused, strong on the supply chain and cost, and offering products which delight the customers,” Maru mentioned. 

“So, I think this is a great synergy to have, where there is technology offered and there is expertise on consumer needs in important segments of the Indian market. When these two come together, the combination can create a national objective. That is why the alliance in India has seen a very great direction. Because it’s not just about business, it’s also about business principles, and both of these match,” Maru told this newspaper.

 

He gave the example of the collaboration between Suzuki, Toyota and Daihatsu in developing the Heartect e-platform. MSIL this month unveiled its first electric car e-Vitara in India based on this platform.

  Toyota will launch the rebadged e-Vitara from its stable soon. 

“This is a good example of how companies can work together and commit themselves to a larger goal,” Maru noted.

“Toyota brings the technology, Maruti brings the skill set that is needed to make it relevant for the consumer. When you go to the market, you are doing business and contributing to a national objective,” he stated.

  TKM’s consolidated net profit surged to Rs 4,787 crore in 2023-24 (FY24), more than tripling year-on-year (Y-o-Y), driven by strong demand for its cars, especially hybrid vehicles and cross-badged cars from the Toyota-Suzuki alliance.

  When asked if the company is expecting a similar level of profitability going ahead, Maru replied: “I believe that the markets determine the profitability. We have costs and efficiencies, which we can control. I believe that the Indian consumer is very discerning and demanding and to serve his diverse needs, we have to be ultra-competitive.”

  Maru mentioned that India has traditionally been a country where the companies do not earn margins easily.

  “There is a lot of competition. There are a lot of cost pressures. So, the business model in India has to recognise this. Going forward, I believe that there is nothing in the environment that will take away these particular conditions. We will continue to be a very competitive market,” he mentioned.

  Maru explained that Toyota’s focus on cost competitiveness extends beyond manufacturing.

  “When people talk about cost competitiveness, they generally focus on the elephant in the room, which is the manufacturing cost. Of course, that has to be focused upon. But there are other costs outside the periphery of your plant. It could be your logistics, the efficiency of your suppliers, etc. I think all of these have to come together holistically to ensure that the final product is priced very competitively but also delivers quality,” he explained.

  He stated that a company like Toyota cannot settle in any kind of comfort and the process of  “optimisation” continues from one level to another.

  He also emphasised Toyota’s continuous pursuit of optimisation, rooted in the concept of kaizen — the idea that small, incremental improvements by many people accumulate into significant results. 

  “In Toyota's production system, the concept of kaizen is implicit. It means that a small step by 1,000 people, one at a time, accumulates into much larger effort than a few large initiatives taken by a few people,” he elaborated.

  “So your corporate DNA needs to ensure that this kind of a never-relaxed, never-be-satisfied, never-rest-at-a-point is there. If you achieve a level, then it's simply about going to the next level. So, the journey of optimization is never complete. Is that enough? No. On top of this, we have to ensure that outside our areas of comfort, how do we work with our alliances, our partners, our stakeholders, our society, to ensure that we build synergies for our customers,” Maru concluded.