Given how the Japanese play their cards so close to their chests, it was a bit of a surprise to see Toyota and Suzuki spill the beans on swapping products for India.

It was less than a month ago when the two companies made known that they would be supplying specific models to each other as part of their partnership. While Toyota would have the Baleno and Vitara Brezza in its India portfolio, the Corolla would head out to the Maruti-Suzuki domain.

A formidable challenge

How the companies work on each of these products to give them a new identity that will fit in with their own corporate image will be a huge challenge. Maruti Suzuki has had a tremendous run in India with a market share of over 50 per cent. With Toyota, its market share is a tenth of Maruti with the Innova being its single-most successful offering. Yet, in terms of customer perception, both brands have a different mind space. Maruti products are generally seen as reliable in terms of mileage, sales and service, affordability and high resale value. The Toyota brand is more aspirational by virtue of its larger global standing and its Innova has a premium association along with top-class reliability and durability.

At the end of the day though, it is Maruti that is the more successful player with almost all its products hitting the bull’s-eye in the market. Toyota’s attempt at cracking the mass market with the Etios hardly worked and the Innova remains its only success story (after the Qualis) and a hugely profitable one at that. The Yaris has just been launched and customer reaction remains to be seen. On the face of it, there is no reason why it should not do well though there is stiff competition in the form of other premium brands like the Honda City and Hyundai Verna.

What next?

Given this backdrop, how would Maruti and Toyota work on their new adopted brands? Will the rebooted Corolla now be pitched as a more affordable offering while still remaining premium enough to be retailed in Nexa outlets? Likewise, will the Baleno and Vitara Brezza have an added premium value by virtue of the Toyota association while helping the company grow its market presence in India?

While these will doubtless be some of the guiding principles among a host of other factors, it is Toyota that will stand to gain immediately since it has more gaps to fill in its India portfolio. The Baleno in its new avatar, which could include exterior changes like the grille, headlights and so on, can generate enough aspiration for the premium hatch buyer who would like to drive around in a Toyota.

Likewise, the resurrected Vitara Brezza, with all the bells and whistles that characterise premium, has the potential to recreate the magic as a Toyota-branded offering. Customers will obviously be aware that these are Suzuki products that now have a new identity. If they believe that buying them will be a step up in ‘perceived status’, there is no reason why they won’t do so.

Similarly, in the case of the Corolla, should Maruti decide to retail the new version at a discount, it will appeal to those buyers who can now look at something more accessible. They will be comforted by the fact that this is the same Toyota machine with some new features and in the hands of a manufacturer that is the best bet in trust and reliability.

Wait and watch

Of course, all these are assumptions at this point because there is no telling what could eventually emerge in terms of product and strategy. Each of the companies, especially Maruti, will also need to ensure that the effort does not lead to an erosion of appeal in the original Suzuki-badged Baleno and Vitara Brezza.

Headquarters in Japan will doubtless have a big say in issues even while the Indian arms slog it out in areas like engineering, R&D and marketing. The exercise will also see teams from the two companies collaborate actively in these areas which, in turn, could create greater camaraderie and a greater sense of appreciation for each other. It is logical to assume that both Maruti Suzuki and Toyota Kirloskar Motor have different work cultures and coming together for a common cause may iron out many differences. It could even put in process a new set of building blocks, which is perhaps what the parent companies intend to do in the first place.

Collaboration helps in boosting creativity where new ideas could emerge. Toyota may also expedite the process of establishing its own R&D centre in India once the bonding with Suzuki becomes stronger. After all, the two have decided to collaborate in a whole lot of other areas, including electric mobility.

Eventually, it will be interesting to see how this partnership pans out globally. Within industry circles, the assumption is that Suzuki will eventually become part of the Toyota fold. It is the smaller of the two and, going forward, is better off with a stronger Japanese entity. There is no telling, though, what could finally emerge though these are exciting times for sure.

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