Toyota Motor Corp. and Suzuki Motor Corp have announced the agreement to hold talks aimed at a partnership in shared procurement, green vehicles, IT and safety technologies.
The government of India has proposed to introduce Corporate Average Fuel Efficiency (CAFE) norms for all car manufacturers in the country. The proposed tie-up between Toyota and Suzuki seeks to address the changes in the regulatory norms especially the CAFE norms.
So what does CAFE norms mean? From April 1, 2017, India will adopt CAFE norms which require cars to be 30 percent or more fuel efficient from 2022 and 10 percent more between 2017 and 2021.
The fuel efficiency or the improvement of the mileage will be decided based on the consumption of fuel by a vehicle to run 100km. The introduction of the CAFE norms is aimed at reducing the carbon emission of the automobile industry.
With the recent ruling by Supreme court of banning diesel vehicles and the subsequent withdrawal could mean the future of diesel vehicles in the passenger vehicle, is bleak.
This leaves the petrol models in jeopardy as it might be impossible for their mileage to improve and the weight of the vehicle is almost the same as the diesel vehicles.
That leaves us with the hybrid technology and not the mild hybrids which is being currently used by Maruti Suzuki in Ciaz and Ertiga. In a scenario where pure hybrids seem to be the future, Toyota and Honda are the leaders in this segment, while Suzuki lacks the technology.
This is where the tie-up between Toyota and Suzuki could be significant especially for the latter. With amarket share of nearly 50 percent, Suzuki with its subsidiary Marutiwill have reasons to worry to hold on to the current market share it enjoys.
With Toyota's advanced technology in hybrids and the with Maruti Suzuki's market share in India, the possible tie-up between the to two Japanese car manufacturers is the best way forward.
Here is an extensive photo gallery of the recently launched Maruti Suzuki Ignis, click to view.