An alliance between Toyota Motor and Suzuki Motor could be a boon to both sides, helping the former gain ground in emerging markets such as India and giving the latter the engineering needed to compete in an increasingly high-tech industry.
Can’t go it alone
The two automakers said Wednesday they were discussing collaboration on environmental, safety and information technology.
Although Toyota President Akio Toyoda told a new conference that the idea of an alliance came together in just two business days after Suzuki Chairman Osamu Suzuki got the ball rolling, there is more to the story. Suzuki’s next partner had been the subject of speculation since August 2015, when the Japanese maker of economy cars ended a capital and business relationship with Germany’s Volkswagen over management conflicts.
Though Chairman Suzuki had said publicly that his company would look to remain independent going forward, another senior executive had acknowledged that collaboration was “necessary” in some fields. Even in India, a successful market for Suzuki, environmental regulations are growing tougher, making investment in technology like hybrid drive systems essential. Rising incomes have also stoked demand for higher-end vehicles in such countries.
Finding a big automaker ally was seen as essential for Suzuki to ensure a presence in self-driving cars. While a Toyota or a Volkswagen has the financial strength to counter the challenge posed by Google and other tech giants in this field — Toyota’s annual research and development budget comes to around 1 trillion yen ($9.59 billion) — Suzuki, which spent just 130 billion yen on R&D in the year ended March 31, hardly stands a chance alone.
Manpower constraints are affecting a wide variety of Japanese businesses. Even Toyota Motor, typically one of the most popular employers, is being forced to raise its recruitment game.
Japan’s top automaker recently held a job fair to hire temporary workers in Aichi Prefecture, its home base in central Japan. Making a pitch to a male candidate, a recruiter said that while the job would require patience and stamina, it would come with a free dorm room as well as a bonus of 100,000 yen ($966).
The recruiter also said there might be a chance to become a permanent employee. The candidate, though not keen on doing the same task day in and day out, said the high salary was attractive.
Toyota has been scrambling for extra hands. In April, the company asked a midsize parts supplier in Aichi to urgently dispatch five employees who could work at Toyota or one of its group companies. The component maker rejected the request, since it had no spare workers.
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