At a surprise press conference October 12 in Japan, Toyota and Suzuki announced that they are in talks about a potential partnership. The announcement was puzzling to industry watchers, but if such a tie-up comes to fruition, we will essentially have three factions of automakers in Japan. Are we on the way to a Japanese Big Three?
In statements made at the press conference, Toyota President Akio Toyoda and Suzuki Chairman (and fantastic eyebrow haver) Osamu Suzuki said that the partnership would focus on safety, environmental and information technologies. Toyoda-san said that we are currently in a state of rapid and change in the auto industry, and that companies “need to have the ability to respond to changes in order to survive.”
The announcement befuddled Japan’s auto industry, not the least of which is because Suzuki specializes in small cars, and Toyota already has a robust small car lineup. It even has an entire subsidiary specializing in them, Daihatsu — which happens to be Suzuki’s biggest rival in the kei car market — that Toyota bought outright in January of this year.
While some outlets are sensationalizing the “failed relationship” Toyota and Suzuki have had in the past, let’s not forget that Toyota already has alliances with several other automakers. It owns a 16.5 percent stake in Subaru, formed a strategic partnership with Mazda in 2015, and upped its ownership of Daihatsu from 51 to 100 percent earlier this year. It even owns 5.9 percent of Isuzu, despite having a controlling stake in its rival Hino.
Suzuki, for its part, had a two-year partnership with Volkswagen until its outspoken boss Osamu Suzuki, told off VW in epic fashion (for an auto exec) over a dispute over Wolfburg’s secrecy involving its diesel engines. In retrospect, it was a good move.
Though the partnership is still in its exploratory phase and nothing is set in stone yet, there could be huge ramifications for the Japanese auto industry. It basically means there will be three major alliances: Toyota-Daihatsu-Hino-Subaru-Isuzu-Mazda-Suzuki, Nissan-Mitsubishi, and Honda. Poor Honda, so lonely.
A little over a quarter century ago, Ford bought Jaguar. Suddenly GM bought Saab and stakes in Subaru and Suzuki. VW ended up with Bentley, Lambo, Bugatti and Skoda. BMW ended up with Rolls Royce and Mini, and Ford ended up with Land Rover, Volvo, Aston Martin, and a controlling stake in Mazda. DaimlerChrysler was formed, and bought a stake in Mitsubishi. It’s also what prompted the Renault-Nissan Alliance.
Today, it may be Nissan’s recent takeover of Mitsubishi that prompted Suzuki to reach out to Toyota. When one large automaker moves to consolidate, others follow. No one wants to get caught without “economies of scale.”
This is one theory of why Toyota and Suzuki are in talks. It may surprise Americans to learn that Suzuki is the fourth largest automaker in Japan. This is thanks to their stellar kei car lineup in a nation where one in three cars sold is a kei jidosha.
One Toyota insider we spoke to believes India is the key. Suzuki has a huge presence there, where joint venture Maruti-Suzuki owns a whopping 47 percent of the market.
As JNC‘s editor at large Ricky Silverio notes, “In India Toyota is considered a premium brand and even their most entry level vehicle is considered aspirational. There is no more lower level model Toyota can create without diluting its reputation. Instead of creating a sub brand (like Nissan did with Datsun), why not start with something that exists and is doing well? It’s a good template which will work in other developing regions like Cambodia and Vietnam where even a Kia is a aspirational vehicle.”
An additional explanation could be as simple as Japan’s tradition of honor and courtesy. As Osamu Suzuki’s at the press conference, “I have been discussing these issues with Toyota’s Honorable Chairman Shoichiro Toyoda at various times.” If that name rings a bell, that’s because he was head of Toyota from 1992-99 and currently an Honorary Chairman. He’s also Akio Toyoda’s father.
Suzuki continued, “And quite recently — I think it was less than a month ago — I ventured further to discuss with him about whether we can explore on ideas to collaborate with Toyota. We were pleased that he had responded that ‘It would be good to at least discuss the potential collaboration between the two companies.'”
And that is that. In Japanese culture, when your father, patriarch and respected mentor even hints that you should help his associate, you do it, no questions asked.
When Akio Toyoda took the mic, he issued this statement: “[Osamu Suzuki] is a great senior who has been leading the industry for a long time. In addition, both Suzuki and Toyota had originated from the Enshu area, and share similar histories on the establishment of our respective companies. I feel deep emotional ties about this fact. I sincerely hope that our collaboration will help carve out the way for the future of the automotive industry.”
Funnily enough, this isn’t the first time Toyota and Suzuki would be bedfellows. Remember when they both supplied cars to GM’s Geo? It’s an interesting time for the auto industry, and it’ll be even more intersting to watch the where the automakers go from here.
Well Honda-Yamaha to be honest in the Motorcycle section……Honda isn’t lonely Mr. Hsu
This is especially interesting as Honda and Yamaha are not only fierce rivals, Yamaha is sort of the “Toyota brand” in motorcycling (not in terms of scale, just their previous working relationship).
Yamaha engineered and developed a lot of the heads for Toyota engines.
Expanding on that last point re: Geo; here in Australia our GM branch (Holden) was also marketing models from both Suzuki (Barina) and Toyota (Apollo/Camry and Nova/Corolla)
And Isuzu? Particuarly with the Gemini, and the Piazza.
Oh, and Suzuki-san’s eyebrows are majestic.
Honda will struggle along in their capacity of being a corporation primarily known as a manufacturer of automobiles, business jets, jet engines, motorcycles/scooters/ATV’s/UTV’s, and extensive outdoor power equipment. Plus solar panels systems and robotics.
And for fun Honda can even make a vehicle faster than a Veyron, even if it’s only on a dry lakebed. 🙂
Indeed. They’ll seemingly continue to make outstanding achievements in the auto industry that no one will care about.
Why? Because whoever they’ve hired as their marketing team (especially in the US) isn’t worth the air in their lungs…not even to inflate a tire.
Don’t you just LOOOOVE how you’ll sit through that entire video with that terrible music torturing your eardrums to get practically NO real information on the project.
Oh, then beneath the top speed achievement they’ll put “660cc” engine in tiny type.
Like…somebody doesn’t even realize that’s a BIG DEAL for such a small engine.
Whoever is responsible for their marketing should be unceremoniously yet unrelentingly be beaten with a rabid mini pinscher! After about six days of that they should have said dog shoved up an accommodating orifice…Then be FIRED and forbidden from applying for unemployment.
Yes, that’s how I really feel.
Lest we forget, these are probably the same people who did little to no marketing for the Honda S2000. Arguably the best sports car ever created.
On the other hand, Toyota seems to have figured it out!
“Toyota-Daihatsu-Hino-Subaru-Isuzu-Mazda-Suzuki, Nissan-Mitsubishi, and Honda. Poor Honda, so lonely.” This one had me laughing. Maybe like the toyo-baru twins, we’ll see a Toy-hats-ino-baru-zu-da-ki septuplet: A sporty, kei, AWD, rotary, diesel, commercial truck for the discerning consumer.
I wonder whether this Alliance(Toyota-Daihatsu-Hino-Subaru-Isuzu-Mazda-Suzuki) has been accomplished.
Very well said Nihonnotekko !!! :-))
The potential in India certainly makes sense. And while it seems strange owning two brands that specialise in small cars (Daihatsu and Suzuki), Toyota would pretty much have the kei car market sewn up – I believe the Suzuki Wagon R is still Japan’s best-selling vehicle.
Consolidating the Suzuki and Daihatsu kei ranges would be great for economies of scale – as I’m sure I’ve read previously (possibly even on JNC), the Japanese brands struggle to make money on keis because Japan is the only market where they’re sold and there’s no way they can pursue collaborations on the cars elsewhere in the world.
Semi-related to the topic at hand – always forget how cool the Geo Storm looks. Real shame that car was never sold in Europe in any form.
Didn’t you get the Isuzu Impulse in that generation?
Nope. We briefly got the first-gen Piazza, the rear-drive, turbocharged one, but nothing after that.
That’s a shame, though I don’t remember even reading a review of the thing in those years. The previous version – Piazza/Impulse – was a GORGEOUS car, esp. in white.
That and the Scirocco were the two that always caught my eye.
HOPEFULLY, it’ll be more of a “technology sharing” situation.
I’d be okay if Toyota would bring Suzuki back stateside, but I’m not holding my breath.
I think if suzuki did the desighns and toyota did the drivetrain they could make some nice sports cars
Is it me or is Toyota team up with every one from Subaru,BMW and now Suzuki. Is it that they have lost their way with 3 brand and too many SUV to be the cars we all love. Not the the boring stuff but the good stuff Supras,Celicas and giving us what we love… Haven’t had that “Feeling” for a long time now.
You’re showing your age… Well, OURS, since I caught that…
Much ado about nothing. The Toyota “alliance” is so vast and loose as to be meaningless. (Somewhat unfortunately as I’m a big fan of Toyota both as automaker and as a corporation on the business side.) Frankly, if you include Subaru, Isuzu, and Mazda under the Toyota umbrella you would have to include BMW… And using the same criteria/logic might as well have claimed that GM had suzerainty over Toyota in the 90s because of Geo. But no. Toyota is one of the premier mega-corporations of our age, and it happens to be (along with Hyundai and Mitsubishi) one of the few that makes cars. Toyota, unlike those other 2, FOCUSES on making cars. So it entirely makes sense that it would have ventures and stakes in all kinds of automotive ventures. Nippon Denso and Yamaha are some of the others that immediately come to mind. (And I do think Toyota has more say about what happens at Yamaha than they do at Isuzu, Subaru, and certainly Mazda or BMW).
As much of a Toyota fanboy I am, I think this article rubs me the wrong way because of Mazda. No company in Japan, and possibly the world, has a much “Faitingu!” (fighting) spirit as Mazda, and its just wrong to include them as some vassal of Toyota or something.
Eventually, it’ll be like in Demolition Man – where ALL restaurants are Taco Bell…
ALL vehicles are Toyota.
Watch the movie, and tell me we ain’t headed that way in a LOT of areas.
can you say monopoly? greedy toyoda
contrary to popular belief, remember that Honda is a relatively small company, I don’t think they have the means to go sucking up shares such as the likes of Toyota. but i think thats why Honda consistently makes such good products. In the famous words of Avis car rentals: “We’re number 2, so we try harder.”
Somehow i can now see my SX4 and Tacoma becoming closer driveway friends