Japan’s Toyota and Suzuki Agreed to Explore Possible Technology Partnership

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On Wednesday, Toyota Motor Corp announced that it planned to explore a possible technology cooperation with another Japan-based automobile company Suzuki Motor Corp to share the cost of developing new technology.

The two companies said that the possible partnership will be on information technology, safety engineering or research and development. Since two companies just started discussing the cooperation, the specific areas in which they would cooperate were not decided yet.

The possible cooperation was proposed in the situation that tighter regulation threatens the gasoline engines and upstarts in Silicon Valley brings new challenges. Under this circumstance, it is much easier for automobile companies to share the costs of developing new technology with their partners than working on it alone. “There is a limit to the research and development that a company can do individually,” Toyota’ president Akio Toyoda said.

“In addition to the R&D which each company is working on individually, it is very important now to have partners who share the same goal and passion. We would like to always keep our doors open for new partnership opportunities, which will contribute to the making of ever-better cars as well as to the development of the automotive industry.” Akio Toyoda said in a statement.

Currently, Suzuki focuses on producing affordable compact cars, and holds over 40% shares in India. However, profits from selling low-margin small vehicles is barely enough for developing new technology. Toyota focuses more on investment in research and development for artificial intelligence and automated driving functions. Toyota is working on selling more cars in emerging market like India, and solving the problems of

decelerated sales growth and profits loss due to stronger yen. The cooperation will benefit both companies and make it easier for companies to face the new challenges together.

Both companies expressed that they would be open to cooperate with other companies and they would go on competing with each other.

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