Toyota, Maruti Suzuki set to clash on shared models

NEW DELHI: Toyota and Suzuki’s tie-up for cross-badging of cars is set to result in a high-pitched battle between the two Japanese companies in the Indian market. Toyota, which will start selling Suzuki’s Brezza mini SUV and Baleno compact from next year as part of the ambitious deal, has said that it will aim to maintain the pricing on the cars even while giving them a new look on the exterior and the interior.

N Raja, deputy MD of Toyota’s Indian subsidiary, said that teams from the two companies have started work on various aspects related to the cross-badging deal, which will also see Maruti Suzuki get access to Toyota’s Corolla sedan for sale under its own branding.

“Though it’s too early to speak in a concrete manner, I feel that we need to match Maruti on the pricing front when we will start selling the Brezza and Baleno under our branding. That is the aspiration and the wish,” Raja told TOI.

The tie-up between the Japanese companies is seen as a bold move as the muchlarger Toyota has agreed to source popular vehicles from Suzuki in India while giving the latter one of its most-popular global product in Corolla. The tie-up has been stitched as Toyota looks at a larger play in one of the world’s most competitive car markets — dominated by smaller vehicles — while Suzuki looks at access to newage technologies such as hybrids and electrics.

Raja said that he saw the deal “more as an opportunity than a threat” as it will help Toyota Kirloskar increase its customer base in India while giving new business opportunity to its dealers. The deal for the Corolla will also help in boosting the manufacturing footprint of Toyota’s India business.

However, he added that there would also be critical challenges to the deal. “Creating a differentiation in the products will certainly be challenging. Also, getting the pricing at par with Maruti will be another critical area.” Toyota will also have to address issues related to the perception of its dealerships and branding. “We are seen as being a premium brand. It will be challenging to ensure that car customers feel comfortable in coming to our showrooms.”

Speaking about the differentiation, Raja said that it is a “difficult task” to achieve, especially as previous attempts at cross-badging (by other manufacturers) have not been very successful in India. “We will be carrying our clinics and studies to get customer feedback.”

Companies such as Renault and Nissan have done cross-badging in India and the shared products include Renault Duster SUV and its Nissan twin Terrano. Renault’s Kwid’s cross-badged Nissan product is the Datsun Redi-Go. Toyota and Suzuki had announced cross-badging deal on March 29, and this followed a memorandum that they originally reached in February last year.