Toyota and Suzuki ensure footprint in Africa
After a successful first year of collaboration in the fields of technological development, vehicle production, and market development in India, the 2 Japanese OEMs have now decided to venture in Africa.
The existing collaboration
Initiated by a MOU in march 2017, the objectives for the Indian market were clear: Toyota/Denso was to help Suzuki develop a high-efficiency engine for its small car market in India (branded “Maruti-Suzuki”), Toyota India (Toyota Kirloskar Motor Private Ltd.) would produce vehicles to be marketed by the 2 brands in Indi market and in a later stage, these vehicles would also be shipped and sold in Africa. Both brands would collaborate when it comes to logistics and sales channels.
The collaboration makes sense for both parties: Toyota’s market share in India is negligible (3%) in comparison with other Asian markets and it’s obvious that the Japanese giant wants a bigger footprint in South-Asia. For Suzuki, it’s a great opportunity to become smarter and benefit from Toyota’s success in other regions.
Toyota has been selling Land Cruisers in Africa since the 1950s and has a good market penetration in most of the sub-Saharan countries. Customers are usually either corporate or governmental today, but projections based on population growth (Africa’s population is expected to double by 2050 and reach 2,5 billion people) demonstrate that the private buyer will be predominant moving forward.
Toyota teaming up with a small car expert, such as Suzuki, that is has become an expert in a small car market, such as India, seems the right approach.