Toyota, Suzuki to introduce electric vehicles in India in 2020

20 November 2017

Japanese automakers SuzukiBSE 2.15 % Motor and Toyota Motor finalised an agreement to manufacture and sell electric vehicles in India by the turn of the decade.

The move, particularly the involvement of Suzuki that sells one in every two passenger vehicles in India through local unit Maruti, gives further credence to the government’s vision of switching to full electric mobility from 2030 and boosts its ‘Make in India’ initiative.

According to the memorandum of understanding signed on Friday, Toyota will provide technical knowhow for the project while Suzuki will manufacture the vehicles for the Indian market and also supply some to Toyota.

“The MoU concluded is part of the overall agreement being firmed up between Suzuki and Toyota. Since this (India’s EV push with a 2030 deadline) was a more urgent issue, it has been addressed first,” Maruti Suzuki chairman RC Bhargava told ET. “It will surely prove beneficial for all involved. We have to make sure that not only the cost, but the performance of the vehicle is such that it meets customer expectations.”

Toyota, the No. 2 automaker in the world, and Suzuki, the thirdlargest in Japan on local sales, have been holding talks since February to forge a partnership in shared procurement, green vehicles, IT and safety technologies.

India, one of the fastest-growing automobile markets, was a key target market and manufacturing hub of those discussions, as the companies sought to leverage Suzuki’s large low-cost manufacturing capability and supplier base here as well as the government’s push to electric mobility.

Friday’s announcement underlines their India focus. It didn’t mention any global plans, which they are expected to unveil at a later stage.The companies will launch activities to promote widespread acceptance and use of electric vehicles in India. These will include setting up of charging infrastructure, human resource development including training for after-sales service technicians and systems for appropriate treatment of end-of-life batteries, they said in a joint press statement. “Toyota Motor Corporation and Suzuki Motor Corporation have concluded a memorandum of understanding on moving forward in considering a cooperative structure for introducing electric vehicles in the Indian market in around 2020,” the statement said.

In line with the agreement, batteries, electric motors and major components for manufacturing electric vehicles will all be procured locally, “helping the Indian government fulfil its ‘Make in India’ initiative, even in the field of EVs”, the press statement said.

In line with the agreement, batteries, electric motors and major components for manufacturing electric vehicles will all be procured locally, “helping the Indian government fulfil its ‘Make in India’ initiative, even in the field of EVs”, the press statement said.

LEVERAGING INDIA

In September, Suzuki chairman Osamu Suzuki announced that the automaker, along with Japanese partners Toshiba and Denso, would invest about Rs 1,150 crore to set up India’s first lithiumion battery manufacturing facility at Hansalpur in Gujarat. Suzuki at the time said their joint venture would leverage India as a base for manufacturing these batteries, which would be mounted on hybrid vehicles and shipped to markets overseas.

VG Ramakrishnan, managing partner at consultancy firm Avanteum Partners, views the new partnership as a win-win for both companies. “On its own Suzuki does not have the resources to invest in development of alternative fuel technologies. The partnership with Toyota enables Suzuki to be future-ready.”

Source: ET