Toyota To Follow Maruti Suzuki’s Low Cost Business Model In India

Toyota Ertiga MPV Rendered

Toyota Kirloskar Motor is reportedly looking at opting for some of Maruti Suzuki’s vendors to reduce production costs of the upcoming models

Toyota and Suzuki’s mutually beneficial relationship has led to the former launching the Glanza hatchback, the rebadged version of Maruti Suzuki Baleno, in the Indian market. More badge-engineered products are in the pipeline as Toyota’s version of the Vitara Brezza compact SUV is expected to launch in the coming months and a Toyota C-segment MPV is also co-developed.

Their partnership concentrates on reducing manufacturing costs and utilising each other’s strengths in different fields. They will also jointly source components for the full-hybrid vehicles according to a report emerged on the internet. Toyota Kirloskar Motor (TKM) is said to use suppliers of Maruti Suzuki India Limited (MSIL) for its upcoming models.

They could include the upgraded or the replacement of the Innova Crysta scheduled to go on sale in 2021-22. Maruti Suzuki’s efficient manufacturing techniques and its presence in the volume-based segments below Rs. 10 lakh have helped in it garnering high volumes every month. Despite the sales slowdown in 2019, Maruti Suzuki did make amends and is almost currently back to its usual best in sales charts.maruti ciaz-2

 

The report went on to suggest that TKM has opted to choose some of the vendors from MSIL. Toyota and Suzuki’s tie-up stems back to 2017 and last year, both announced to have bought minor stakes in each other. Toyota has already confirmed that it is looking into ways how Maruti Suzuki operates locally and its business models emphasising on producing affordable yet reasonably priced vehicles.

TKM is said to have made cost-cutting its priority as it prepares to source components for forthcoming vehicles arriving around 2022 with hybrid powertrains in mind. A person in the condition of anonymity said if Maruti Suzuki’s suppliers provide components at lower costs, TKM will opt for them instead and it could result in its pricing being more competitive.

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Due to the soon-arriving BSVI emission standards, TKM’s domestic lineup has shrunken and it does not have any volume drawing products in the mass-market segments except for the Glanza and the underwhelming Yaris C-segment sedan. Things could improve in sales with the rebadged Vitara Brezza.

*Images representational