Toyota And Suzuki Partner To Build Hybrid Cars For The Indian Market

JAKARTA - A Toyota factory in southern India in August will start building a hybrid sports vehicle (SUV) developed by Suzuki.

Two power trains will be available in the car. One with a mild hybrid configuration from Suzuki and the other as a powerful hybrid from Toyota. In mild hybrids, the battery only assists the piston engine, without the all-electric mode available in powerful hybrids.

Building the model is part of a wider partnership formed between the two Japanese automakers in 2017. The car will be sold in India and exported to markets including Africa.

Green investors have criticized Toyota, the world's largest automaker by sales, for being slow to shift its product line to battery electric vehicles (BEVs).

But the company argues that hybrids make more sense in markets where infrastructure isn't BEV-ready and needs to offer a wide range of options.

It is also said that most of the electricity in developing countries is generated by burning coal or other fossil fuels. Because BEVs rely on that generation, they are more polluting in that market than hybrids.

Toyota last year committed to spending $60 billion by 2030 to electrify its vehicle models, but only half on development of fully electric cars.

The new SUVs, which have not been named, will be marketed as Toyota and Suzuki, and each company relies on its local affiliates to do so.

While the Indian government wants automakers to make more electric models, uptake for such vehicles has so far been slow, and only Tata Motors is building them locally.

Suzuki committed in March to invest USD 1.4 billion (IDR 207.7 trillion) in the country to produce BEVs and batteries. But its local unit, Maruti Suzuki, India's biggest automaker, said it would not launch a fully electric vehicle before 2025.

Toyota is also focusing on preparing the supply chain for electric vehicles in India before building BEVs there. It said in May that Toyota would invest more than $600 million to make India a global production hub for EV parts, including electric cars.

While the current BEV is still too expensive for major buyers in India and other developing countries. The same goes for complex hybrid cars like the Prius, whose production costs are difficult for Toyota to cut.

This is one reason why Toyota has partnered with Suzuki, which has championed low-cost manufacturing in India. The agreement between the two includes joint product development, lowering local sourcing costs and technology sharing.