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Toyota, Suzuki in for whirlwind courtship

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Japanese automakers announce formal talks to form business partnership

TOKYO: Toyota Motor and Suzuki Motor said yesterday they had agreed to begin formal talks aimed at forging a partnership in shared procurement, green vehicles, IT and safety technologies.

The agreement takes the two Japanese automakers a step closer to a tie-up that could give Suzuki, a maker of affordable minivehicles and compact cars, access to Toyota's technology. The world's second-biggest car maker in return would benefit from Suzuki's strong market position in India.

"Toyota and Suzuki have agreed to work towards the early realisation of a business partnership," they said in a joint press release.

The companies had said last October they were exploring a partnership, citing technological challenges facing automakers and the need to keep up with consolidation in the global auto industry.

Suzuki, Japan's fourth-largest automaker, has said it has been struggling to keep pace with the speed of research and development (R&D) in the industry, a technology race that Toyota, with its greater financial clout, is better able to cope with.

Toyota invests heavily in R&D in areas including automated driving, artificial intelligence and lower-emission cars.

Suzuki has long sought a bigger partner. A tie-up with Volkswagen ended on a sour note in 2015, after the German carmaker accused Suzuki of violating their pact by agreeing a diesel engine deal with Fiat.

For Toyota, access to Suzuki's tightly knit supply chain network in India, which the automaker has cultivated since the 1980s, could help it develop and sell more mainstream cars tailored for the local market.

"We would be happy to share lessons we learned from our experience in India and emerging markets with Toyota if they wish, to make this a win-win partnership for both parties," Suzuki Vice-Chairman Yasuhito Harayama told reporters at a briefing in Tokyo after Suzuki released its earnings results for the three months through Dec 31.