By Aditi Shah
NEW DELHI (Reuters) – Toyota and Suzuki announced on Friday that they will begin production of hybrid vehicles in India, a segment Toyota said is best suited for markets such as India.
Toyota’s plant in southern India will begin production of a Suzuki-designed hybrid sport utility vehicle (SUV) in August, the companies said.
Two engine designs will be available: one with a mild hybrid setup from Suzuki and the other as a solid hybrid from Toyota. In the compact hybrid, the battery only supports the piston engine, without the electric mode found in the powerful hybrid.
The creation of the model is part of a wider partnership established between the two Japanese automakers in 2017. It will be sold in India and exported to markets such as Africa.
The new SUV, which has yet to be named, will be sold by Toyota and Suzuki, with each company relying on its domestic partners to do so, they said in a joint statement.
Suzuki pledged in March to invest $1.4 billion in the country to produce battery-electric vehicles (BEVs), but its domestic unit, Maruti Suzuki, India’s largest carmaker, said it would not launch an electric vehicle before 2025.
Toyota is also aiming to establish a supply chain for electric vehicles in India before manufacturing BEVs in the country. The company said in May it would invest more than $600 million to make India a global hub for manufacturing electric vehicle parts, including electric drives.
While BEVs are currently too expensive for mainstream buyers in India and other emerging economies, compact hybrids like the Prius are also unattractive, which Toyota’s manufacturing costs have struggled to cut.
Agreements between the automakers include joint product development, reduced domestic distribution costs and technology sharing.