The two Japanese automakers could announce a deal as soon as Monday, setting specific points of cooperation later. On the development side, these are expected to include self-driving technology and applications for information technology, as well as advancements needed to keep up with increasingly strong global environmental standards. Partnering on procurement could involve sharing sources for parts in Japan and abroad.
Toyota has deemed it necessary to bolster cooperation with other automakers in order to maintain its influence as nontraditional players such as tech companies stoke competition in the auto sector. Suzuki has sought a powerful partner since dissolving a capital and business tie-up with Germany's Volkswagen in 2015. Suzuki Chairman Osamu Suzuki last year approached Shoichiro Toyoda, Toyota's honorary chairman, regarding collaboration.
Suzuki and Toyota unit Daihatsu Motor, which together control more than 60% of Japan's market for minivehicles known as kei cars, will continue to sell automobiles under their separate brands to avoid falling foul of antitrust laws. But the two will collaborate in ways that steer clear of that risk, starting with a loose partnership on matters such as technological development.
A capital tie-up, including cross-shareholdings, will be discussed in the future to deepen ties between the groups.
Toyota has cast a wide net in the auto sector, striking capital and business partnerships with peers such as Subaru maker Fuji Heavy Industries and Isuzu Motors in the mid-2000s, as well as with Mazda Motor and Germany's BMW more recently. This aims to let Toyota shape industry standards for IT and self-driving technology to its advantage. The Suzuki deal would raise the number of autos Toyota and its allies make each year to at least 18 million.
In January, Toyota teamed with Ford Motor of the U.S. to launch the SmartDeviceLink Consortium promoting technology to integrate devices such as smartphones with vehicles. Fuji Heavy, Mazda and Suzuki have signed on as well. Toyota and its partners are also exploring collaboration on automotive operating systems.
Alliances in emerging nations are less developed. Though Suzuki commands a hefty share of the growing Indian auto market, for example, its soon-to-be partner has failed to make as much of a mark there as in countries such as Japan and the U.S. The Toyota group has turned Daihatsu, a full subsidiary since 2016, into a core unit for small cars in emerging markets. Working with Suzuki on parts procurement and the production of certain models is expected to build the Japanese auto giant's presence there further.